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Analysis of Intuitive Surgical, an American company that develops, manufactures and markets robotic products

Analysis of Intuitive Surgical, an American company that develops, manufactures and markets robotic products

23 December 2020

Intuitive Surgical is an American company that develops, manufactures and markets robotic products that improve clinical performance through minimally invasive surgery. The company is especially famous for its product – the Da Vinci system. This system facilitates operations using a minimally invasive approach and is controlled directly by the surgeon using a console. In recent years, this system has become increasingly used in heart valve surgery. During 2019-2020, more than 5,000 such systems were installed around the world. The cost of one device is $ 2M.

The main market for the company is the United States, which accounts for about 70% of the company’s revenues.

Revenue: $ 1B Q3 (-4.5% YoY)

Operating Income: $ 270M Q3 (-27% YoY)

Net Income: $ 313M Q3 (-20% YoY)

Earnings per share: $ 2.77, which is better than the forecast of $ 2.07

As you can see from the financial statements, during the crisis, the company was actively increasing its assets.

Business segment income:

Instruments and accessories – 52.68%

Systems – 30.26%

Services – 17.06%

EPS forecast for the current quarter: $ 3.11

At the moment, the demand for the company’s products is actively growing. After all, more and more clinics are beginning to use robotic operating methods. The company not only actively invests in the creation of new products, but also earns income from products already on sale.

Interestingly, Intuitive Surgical is a zero level company for a long time. It seems to us that this is one of the drivers of growth in demand among experienced investors for this security.

Thus, #ISRG is an interesting and very attractive company to invest in. Since she has a stable cash flow from current sales and actively invests in new developments. But it should be noted that at the moment the company’s shares can be considered overvalued.

ISRG within the short-term trend, you can try to catch the correction from the levels 770/775. However, it should be remembered that globally the stock is at its maximum historical values, which is clearly seen in the following chart.

Thus, a more significant correction can be expected. The 620/630 levels represent ideal long term entry points. You also need to understand that these levels are dynamic and the longer the stock stays higher, or continues to move up, then the levels will move higher. And the fact that the company does not use debt can have a positive effect on the further dynamics of its value. 

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    23 December 2020
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