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Intuitive Surgical Stock Is Trading Higher On Earnings Beat, As Easing Of COVID-19 Concerns Boosted Topline And Bottomline Growth

Intuitive Surgical Stock Is Trading Higher On Earnings Beat, As Easing Of COVID-19 Concerns Boosted Topline And Bottomline Growth
  • Intuitive Surgical Inc (NASDAQ: ISRG) shares have gained momentum as the surgical-robotics equipment company reported Q1 results well above Wall Street estimates. 
  • Revenue in the first quarter reached $1.29 billion, reflecting an 18% Y/Y increase. The consensus Wall Street estimate was $1.11 billion. 
  • Net income per share came in at $3.51 per share, beating the estimate of $2.63.
  • There was one key underlying theme behind this strong quarterly performance: recovery from the impact of COVID-19. CEO Gary Guthart said, "We are pleased with this quarter's performance. Our performance reflects customers choosing Intuitive as COVID eases."
  • The company shipped 298 da Vinci robotic surgical systems in Q1, up from 237 systems a year ago, driving systems revenue 30% higher year over year to $369 million.
  • Instruments and accessories revenue jumped 14% to $706 million, primarily due to 16% growth in da Vinci procedures. Services revenue was flat year over year at $217.5 million. 
  • The company says that 16% procedure growth in Q1 was about the same as in the same quarter last year.
  • The company kept spending under control, with operating expenses of $485.8 million, just 1.2% higher year over year.
  • For FY21, procedure growth of 22%-26% is anticipated to be driven by U.S. general surgery, the company said in the Q1 2021 earnings conference call.
  • In 2021, it expects pro forma gross profit margin to be within a range of between 70% and 71% of revenue.
  • After a robust earnings beat, Intuitive Surgical has witnessed revision in target price from analysts, including:
    • Increase in price target to $860 from $825 from SVB Leerink and with a Market Perform rating. 
    • Wells Fargo also increased the price target to $892 from $879 with an unchanged Overweight rating. The analyst notes that ISRG issued formal 2021 guidance for the first time.
    • Piper Sandler raised PT to $840 from $735 and keeps a Neutral rating. Despite some lingering COVID-19 impact in the quarter, Intuitive posted "healthy" mid-teens procedure growth and a better than expected quarter from a robot placement perspective driven in part by more operating leases, says the analyst.
    • Baird upgraded ISRG to Outperform from Neutral, and PT increased to $925 from $825.
    • Oppenheimer upgraded the stock from Underperform to Perform.
    • Citi raised the firm's price target to $939 from $862 and reiterated a Buy rating.
    • JPMorgan, too increased the PT to $900 from $840 with an Overweight rating unchanged.
    • Deutsche Bank raised the price target from $690 to $825 and kept a Hold rating.
  • Price Action: ISRG shares increased 8.07% at $876.34 (stock's 52-week high) in market trading hours on the last check Wednesday.

Latest Ratings for ISRG

Apr 2021Deutsche BankMaintainsHold
Apr 2021CitigroupMaintainsBuy
Apr 2021Morgan StanleyMaintainsEqual-Weight

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