Here's Why You Should Retain Intuitive Surgical (ISRG) Stock

Intuitive Surgical, Inc.
ISRG is well
poised for growth on improving adoption of da Vinci Surgical System
and strong international presence.

Shares of this Zacks Rank #3 (Hold) company have gained 34.4%
compared with the

industry‘s 9.4% growth in a year’s time. The S&P 500 Index
has rallied 29% in the same time frame.

Intuitive Surgical — with a market capitalization of $121.58
billion — designs, manufactures, and markets the da Vinci surgical
system along with related instruments and accessories. The da Vinci
surgical system is an advanced robot-assisted surgical system. It
anticipates earnings to improve 10% over the next five years. It
beat earnings estimates in three of the trailing four quarters and
missed once, with the average surprise being 18.6%.

What’s Favoring the Stock?

Intuitive Surgical’s robot-based da
Vinci surgical system enables minimally-invasive surgery, which
reduces risks associated with open surgery. The company continues
to gain from this system, which in turn bolsters overall
performance.

In first-half 2021, da Vinci procedures improved
significantly and the momentum continued in the third quarter, with
Intuitive Surgical witnessing growth of 20%. Intuitive Surgical
placed 6,525 da Vinci surgical systems in the third quarter, with
the installed base growing 11% year over year. On the back of
stronger recovery in procedures so far, the company currently
projects procedure growth of 27-29% in 2021 (narrowed from the
previously guided range of 27-30%) due to the impact of the Delta
variant and third-quarter performance.

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Source: Zacks Investment Research

With respect to digital
capabilities, the company remains focused on improving the
ecosystem. During the second quarter, Intuitive Surgical continued
to engage customers in data analytics and opportunity analysis for
surgical programs, which is the cornerstone of its Your Data, Your
Truth analytics efforts. The company has made advancements with the
launch of My Intuitive, which is a mobile app enabling surgeons to
manage their da Vinci experience and training, log into da Vinci systems, and view operative data from the palm of their hand. It
has been of great help amid this public health crisis.

During the second quarter, the company introduced this app to
the first users in Europe. Digital learning programs continue to be
crucial part of its overall learning initiatives. Cumulatively,
these programs trained above 2,200 care team members in the second
quarter, thereby demonstrating organizational strength and
localizing programs, and responding with agility to pandemic-driven
demand.

Intuitive Surgical is gradually gaining prominence in markets
outside the United States. For third-quarter 2021, revenues outside
the United States totaled $451.1 million, up 35.1% on a
year-over-year basis. This was driven by substantial improvement
(30%) in procedure volume on account of higher prostatectomy
procedures and earlier-stage growth in kidney cancer procedures,
general surgery, gynecology, and thoracic surgery. Outside the
United States, the company placed 109 systems in the third quarter
compared with 79 in the prior-year period. Of these, 47 were in
Europe, 20 in Japan and 17 in China.

What’s Weighing on It?

The COVID-19 pandemic adversely
affected the global supply of semiconductors and other materials
utilized in Intuitive Surgical’s products. Although the company has
been making every effort to secure the supply required for ensuring
the fulfillment of consumer demand, global shortages might result
in higher output costs or delay in production.

Estimates Trend

Intuitive Surgical has been
witnessing an upward estimate revision trend for 2021. In the past
60 days, the Zacks Consensus Estimate for its earnings has moved
0.4% north to $4.94 per share.

The Zacks Consensus Estimate for fourth-quarter 2021 revenues
is pegged at $1.51 billion, suggesting growth of 13.7% from the
year-ago reported number.

Stocks to Consider

Some better-ranked stocks in the
broader medical space include
Thermo Fisher Scientific Inc.
TMO,
McKesson Corporation
MCK and
AmerisourceBergen Corporation
ABC.

Thermo Fisher surpassed earnings estimates in each of the
trailing four quarters, with the average being 9.02%. The company
currently carries a Zacks Rank of 2 (Buy). You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks
here

.

Thermo Fisher‘s long-term earnings growth rate is estimated
at 14%. The company’s earnings yield of 3.7% compares favorably
with the industry’s (3.6%).

McKesson beat earnings estimates in each of the trailing four
quarters, with the average being 19.9%. The company currently
carries a Zacks Rank #2.

McKesson’s long-term earnings growth rate is estimated at
8.9%. The company’s earnings yield of 9.9% compares favorably with
the industry’s 3.2%.

AmerisourceBergen surpassed earnings estimates in each of the
trailing four quarters, with the average being 5.5%. The company
currently carries a Zacks Rank of 2.

AmerisourceBergen’s long-term earnings growth rate is
estimated at 11.3%. The company’s earnings yield of 8.9% compares
favorably with the industry’s 3.3%.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock
to gain +100% or more in 2021. Previous recommendations have soared
+143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street
radar, which provides a great opportunity to get in on the ground
floor.

Today,
See These 5 Potential Home Runs >>

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Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report

Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report

AmerisourceBergen Corporation (ABC): Free Stock Analysis Report

McKesson Corporation (MCK): Free Stock Analysis Report

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