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Intuitive Surgical (ISRG): Strong Buy on Q3, Portfolio Strength

On Oct 23, Zacks Investment Research upgraded Intuitive Surgical, Inc.ISRG to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Strong third-quarter performance, raised guidance and rising popularity of the da Vinci system resulted in the upgrade. Notably, Intuitive Surgical has bettered the Zacks Consensus Estimate by an average of 15.33% over the last four quarters.

In the recently concluded third quarter, Intuitive Surgical reported non-GAAP EPS of $5.24, signifying a 33.67% surge on a year-over-year basis. Adjusted earnings, including stock-based compensation, were reported at $4.50, which comfortably beat the Zacks Consensus Estimate bycents??.

Notably, revenues in the third quarter of 2015 grew 10% to $589.7 million from the figure recorded in the same quarter last year. Growth in da Vinci procedure volumes has been around 15% on a year-over-year basis. Intuitive Surgical placed 117 da Vinci Surgical Systems as compared with 111 in the year-ago quarter.

Intuitive Surgical forecasts growth in procedural volumes in full-year 2015 in the range of 13% to 14%, higher than the earlier projection of 11% to 13%

Meanwhile, Intuitive Surgical continues to expand its product portfolio. The company filed for FDA 510(k) clearances for Single-Site instruments and 30mm EndoWrist stapler in the third quarter. Recently, Intuitive Surgical launched integrated table motion for Xi in Europe. The company has also submitted its U.S. 510(k) application.

We believe that growing adoption of Intuitive Surgical's da Vinci system among physicians for general surgery, oncology, urology and gynecology procedures is a key growth catalyst. Moreover, increasing procedural volumes outside the U.S. and an expanding product pipeline presents significant growth opportunities for the company.

Estimate Revisions

The Zacks Consensus Estimate for fiscal 2015 and 2016 remained steady at $14.53 and $17.60, respectively, over the last 90 days.

Other Stocks to Consider

One may also consider other favorably ranked players in the industry like Masimo Corp. MASI , Natus Medical BABY and Cesca Therapeutics KOOL . All the three stocks carry the same Zacks Rank as Intuitive Surgical.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

INTUITIVE SURG (ISRG): Free Stock Analysis Report

MASIMO CORP (MASI): Free Stock Analysis Report

NATUS MEDICAL (BABY): Free Stock Analysis Report

CESCA THERAP (KOOL): 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 Nasdaq, Inc.


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

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