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Intuitive Surgical (ISRG) Up on Solid Preliminary Q4 Results

Zacks Equity Research

Intuitive Surgical, Inc. ISRG recently announced preliminary results for fourth-quarter 2019.

Revenues are anticipated to total $1.28 billion, up 22% year over year. The Zacks Consensus Estimate for the metric is $1.19 billion.

The company is scheduled to release fourth-quarter and full-year financial results on Jan 23.

Shares Up

Intuitive Surgical’s fourth-quarter preliminary results boosted its shares, which climbed 0.7% to $585.79 at the close of the session, following the announcement.

Notably, the Zacks Rank #3 (Hold) stock has rallied 13.1% compared with the industry and S&P 500 Index’s 12.2% and 10.5% growth, respectively, in the past three months.

Highlights

Preliminary instrument and accessory revenues increased 24% in fourth-quarter 2019 to approximately $671 million, primarily driven by growth in da Vinci procedure volume.

In November 2019, the company had received FDA clearance for the SynchroSeal instrument and E-100 generator. SynchroSeal is a single-use, bipolar, electrosurgical instrument created for grasping, dissection, sealing, and transection of tissue that provides enhanced versatility to the company’s da Vinci Energy portfolio. The E-100 generator is an electrosurgical generator developed to power two key instruments — Vessel Sealer Extend and SynchroSeal — on the da Vinci X and Xi Surgical Systems.

Full-Year Results

On a full-year basis, revenues are expected to be $4.48 billion, indicating an increase of 20% from the previous year. The Zacks Consensus Estimate for revenues is pegged at $4.40 billion.

Preliminary instrument and accessory revenues for 2019 increased 23% year over year to $2.41 billion. Preliminary systems revenues for 2019 climbed 19% year over year to $1.35 billion.



da Vinci Update

Fourth-quarter worldwide da Vinci procedures increased approximately 19% from the year-ago quarter. Notably, the company shipped 336 da Vinci Surgical Systems in the fourth quarter compared with 290 in the year-ago period. Intuitive Surgical expects worldwide da Vinci procedures to grow 13-16% in 2020.

Full-year worldwide da Vinci procedures increased about 18% from the previous year. The company shipped 1,119 da Vinci Surgical Systems in 2019 compared with 926 in 2018.

Our Take

Intuitive Surgical is anticipated to have delivered a solid fourth-quarter performance. Notably, the company’s top line is projected to beat the consensus mark. On occurrence of the same, it will mark the second consecutive beat.

Flagship da Vinci system is also expected to have put up a solid show in the fourth quarter. Additionally, Intuitive Surgical received FDA clearance for the SynchroSeal instrument and E-100 generator. Management expects strong contributions from da Vinci in 2020. However, the company has not issued any guidance for 2020.

Key Picks

Some better-ranked stocks from the broader medical space include Patterson Companies, Inc. PDCO, West Pharmaceutical Services, Inc. WST and DENTSPLY SIRONA, Inc. XRAY, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Patterson Companies has an expected long-term earnings growth rate of 6.4%.

West Pharmaceutical has an estimated long-term earnings growth rate of 14%.

DENTSPLY SIRONA has a projected long-term earnings growth rate of 11.6%.

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