Intuitive Surgical, Inc. (ISRG) reported stronger-than-expected Q2 results, topping both earnings and revenue estimates. The beat was attributable to strong growth in da Vinci procedures and system placements, driven by a rebound in robotic procedures that were deferred due to the COVID-19 pandemic.
Shares of the manufacturer of robotic products designed for minimally invasive surgery have gained 39% over the past year.
The company reported adjusted earnings of $3.92 per share, beating analysts’ expectations of $3.06 per share. Revenues of $1.46 billion exceeded the consensus estimate of $1.26 billion.
Meanwhile, revenues jumped 72% on a year-over-year basis, implying a 2-year compound annual growth rate (CAGR) of 15% from 2019. The company reported earnings of $1.11 per share in the prior-year period. (See ISRG stock charts on TipRanks)
During the quarter, 328 da Vinci Surgical Systems were shipped, reflecting an increase of 84%, versus 178 systems shipped in the prior-year quarter.
Intuitive CEO Gary Guthart commented, “We are pleased with our second quarter procedure growth and financial results, which reflect both the demand for high-quality minimally invasive procedures as well as a return to surgeries deferred during the pandemic.”
Following the upbeat Q2 results, Stifel Nicolaus analyst Rick Wise increased the price target from $1,060 to $1,100 (16.4% upside potential) and reiterated a Buy rating on the stock.
Wise said, “Recording yet another exceptionally-robust quarterly-performance, Intuitive 2Q results outperformed Stifel/Consensus estimates on all key metrics: Sales, EPS, procedure volume growth, and system placements.”
He further added, “Encouragingly, the outperformance pushed ISRG 2021 procedure growth guidance to +27%-30% from +22%-26%. All this prompts us to move our numbers higher for 2H21 and beyond, as detailed in our model below.”
Consensus among analysts is a Moderate Buy based on 7 Buys and 8 Holds. The average Intuitive Surgical price target of $988.07 implies 4.6% upside potential to current levels.
ISRG scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.