Over the past six months, Intuitive Surgical’s stock price fell to $516.25. Shareholders have lost 5.3% of their capital, disappointing when considering the S&P 500 was flat. This may have investors wondering how to approach the situation.
Following the pullback, is now a good time to buy ISRG? Find out in our full research report, it’s free.
Why Do Investors Watch Intuitive Surgical?
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ:ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Three Positive Attributes:
1. Elevated Demand Drives Higher Sales Volumes
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful Surgical Equipment & Consumables - Specialty company because there’s a ceiling to what customers will pay.
Intuitive Surgical’s system placement punched in at 367 in the latest quarter, and over the last two years, averaged 11.8% year-on-year growth. This performance was impressive and shows its offerings have a unique value proposition (and perhaps some degree of customer loyalty). 
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect Intuitive Surgical’s revenue to rise by 14.6%. While this projection is slightly below its 16.4% annualized growth rate for the past two years, it is admirable and indicates the market is baking in success for its products and services.
3. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Intuitive Surgical’s EPS grew at a spectacular 12.3% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses.
Final Judgment
Intuitive Surgical possesses several positive attributes. After the recent drawdown, the stock trades at 61.9× forward P/E (or $516.25 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More Than Intuitive Surgical
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