Analyst Sees Untapped Market For Intuitive Surgical Inc.

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Intuitive Surgical Inc.
ISRG
has barely scratched the surface of market for hernia surgery that could boost its annual revenue by a third, an analyst said Thursday. The Sunnyvale, California maker of robots used in minimally invasive surgery changed hands recently at $500.80, up 6 percent. The shares are off about 5 percent in the year to date. Intuitive has an 85 percent lock on the U.S market for removing prostates, while about 40 percent of hysterectomies are performed using its equipment. But Wedbush's Tao Levy said only 2 percent of hernia repair operations are performed by Intuitive's robots, which are called da Vinci systems. Procedures to cure the ailment could be "the next significant driver" for Intuitive according to Levy, who expects Intuitive will boost spending on marketing, research and collaborative efforts in the field. Indeed, in a small gesture in that direction, Intuitive announced last month that it joined the American Hernia Society Quality Collaborative, making a $50,000 contribution to its educational foundation. Intuitive's 2014 revenue fell 6 percent to $2.13 billion. Although sales have been generally on an upswing in recent quarters, "it's critical that newer, emerging uses of the da Vinci system gain traction in order to drive greater adoption of robotic surgery," according to Huang, who maintained an Outperform rating and $600 target. Huang said that historically, da Vinci procedures have performed well in markets that have had difficulty making a switch to minimally invasive surgery according to Huang. Hernia repair fits that bill, in Huang's view.
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