Credit: Image source: TransEnterix.What happened
In response to the company announcing the sale of its first Senhance Surgical Robotic System in the U.S., shares of TransEnterix (NYSEMKT: TRXC) rose as much as 15% in early-morning trading on Monday. Shares have since settled down but were still up 7% as of 11:40 a.m. EST.
So what
TransEnterix announced today that Florida Hospital -- a member of one of the largest not-for-profit healthcare systems in the country -- has agreed to purchase a Senhance system. This news marks the company's first sale since the Senhance System received FDA approval about a month ago .
Here's what Dr. Steve Eubanks -- a surgeon and executive medical director at the hospital -- had to say about the purchase decision:
Traders cheered the company's first U.S. sale, which prompted a rally in shares today.
Image source: TransEnterix.
Now what
It might seem crazy to think that a company's stock deserves to rally from the news of a single sale, but in TransEnterix's case, the market's reaction appears warranted. After all, TransEnterix had previously sold a grand total of three Senhance Systems worldwide since acquiring the company that developed the device in September 2015. That's not exactly a blazing fast start, so it is understandable that investors were skeptical about the company's ability to compete against companies like Intuitive Surgical in the U.S. Today's news should help to alleviate that concern (at least a little bit).
On the flip side, it is worth pointing out that Florida Hospital and Dr. Eubanks already have an established history with TransEnterix, so investors probably shouldn't credit this sale to the company's commercial team. In fact, TransEnterix had previously announced that it had established an "innovation center" at Florida Hospital, Orlando that will serve as a clinical training and procedural development site. Eubanks was even quoted in the press release announcing the center, so he clearly has an established relationship with the company.
So was this sale already in the bag? Or would Florida Hospital have purchased a Senhance System even if it did not have an established relationship with the company? Since there's no real way to answer that question, my view is that TransEnterix's bulls should remain optimistic about the company's potential, but should also take today's news with a grain of salt.
10 stocks we like better than TransEnterix
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and TransEnterix wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 6, 2017
Brian Feroldi owns shares of Intuitive Surgical. The Motley Fool owns shares of and recommends Intuitive Surgical. The Motley Fool has a disclosure policy .
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.
