Will Intuitive Surgical (ISRG) Disappoint This Earnings Season? - Analyst Blog

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Intuitive Surgical Inc. ( ISRG ) is set to release its 2014-second quarter results on Jul 22, after the closing bell. In the last quarter, the company posted a negative surprise of 20.1%. Let's see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Intuitive Surgical generates recurring revenue through its razor blade business model. The model ensures that the company continues to generate revenues following the initial sale of the da Vinci Si Surgical System.

The company keeps innovating new technologies for its Surgical Systems. The company's recently launched da Vinci Xi won the U.S. Food and Drug Administration (FDA) as well as Conformité Européenne (CE) Mark in Europe.

However, Intuitive Surgical faces the risk of adoption of its procedures as well as risk of lower capital spending by hospitals particularly during the current changes emanating from healthcare reform in the U.S.

Further, customer trade-out program for the recently purchased da Vinci Si Surgical Systems with the company's recently announced da Vinci Xi Surgical System has been negatively affecting the company's earnings.

Earnings Whispers?

Our proven model does not conclusively show that Intuitive Surgical is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP , the difference between the Most Accurate Estimate of $2.73 and the Zacks Consensus Estimate of $2.76, stands at -1.09%.

Zacks Rank #3 (Hold): The combination of Intuitive Surgical's Zacks Rank #3 (Hold) and -1.09% ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Cepheid ( CPHD ), Earnings ESP of 22.22% and a Zacks Rank #3 (Hold).

Hospira Inc. ( HSP ), Earnings ESP of 1.79% and a Zacks Rank #2 (Buy).

Wright Medical Group Inc. ( WMGI ), Earnings ESP of 2.22% and a Zacks Rank #1 (Strong Buy).


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INTUITIVE SURG (ISRG): Free Stock Analysis Report

HOSPIRA INC (HSP): Free Stock Analysis Report

WRIGHT MEDICAL (WMGI): Free Stock Analysis Report

CEPHEID INC (CPHD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CE , ISRG , HSP , WMGI , CPHD

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