Intuitive Surgical has had an impressive run over the past six months as its shares have beaten the S&P 500 by 6.4%. The stock now trades at $491.85, marking a 9.4% gain. This was partly thanks to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is now still a good time to buy ISRG? Or are investors being too optimistic? Find out in our full research report, it’s free.
Why Do Investors Watch ISRG Stock?
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. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Intuitive Surgical’s sales grew at an impressive 18.2% compounded annual growth rate over the last five years. Its growth surpassed the average healthcare company and shows its offerings resonate with customers.
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 14.2%. While this projection is below its 18.9% annualized growth rate for the past two years, it is particularly healthy for a company of its scale 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 21.4% compounded annual growth rate over the last five years, higher than its 18.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
Intuitive Surgical is an interesting business with potential, and with its shares beating the market recently, the stock trades at 48.5× forward P/E (or $491.85 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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