Tags: Intuitive | Surgical | grow | ISRG

Intuitive Surgical Seems Likely to Grow as the World Ages

By    |   Wednesday, 30 May 2012 10:05 PM EDT

Intuitive Surgical (ISRG) offers investors a chance to take a position in a field that seems likely to grow as the world ages: Less invasive, robotic surgical tools. The promised upside of such surgery is shorter recovery times, which should be a cost saver for overburdened medical systems.

Intuitive Surgical designs, manufactures and markets da Vinci Surgical Systems and related instruments and accessories. Its products are used to perform minimally invasive surgery (MIS).

A da Vinci Surgical System consists of a surgeon’s console, a patient-side cart and a high-performance vision system. The da Vinci Surgical System translates a surgeon’s natural hand movements, which are performed on instrument controls at a console, into corresponding micro-movements of instruments positioned inside the patient through small incisions, or ports.

The da Vinci Surgical System is designed to provide its operating surgeon with intuitive control, range of motion, fine tissue manipulation capability and 3-D, High-Definition (HD) vision while simultaneously allowing them to work through the small ports of MIS, ISRG managment said in a recent filing.

“For 2012, Intuitive is focused on the following: first, continuing our growth in gynecology and urology worldwide through outstanding execution in the field; second, disciplined execution of our Single-Site and vessel sealing launches focused on outstanding early customer experiences,” Intuitive Surgical President and CEO Gary S. Guthart said in a recent conference call.

“Third, building robust clinical programs with leading customers in emerging procedures and general surgery, thoracic surgery and transoral surgery; and finally, strengthening our capabilities in the international markets, particularly Europe, Japan and Korea.”

Intuitive Surgical has a market cap of $20.96 billion in a sector, healthcare equipment and supplies, where the average company size is $4.51 billion. Its trailing 12-month P/E ratio is 39.96 and its five-year projected price-to-earnings-growth (PEG) ratio is 1.92, compared to 2.15 for the sector.

Its projected earnings per share growth for the coming year is 18 percent, compared to a sector average of 16.59 percent.

Leading edge

Analysts are generally neutral on ISRG stock. JMP Securities calls it a buy, while Raymond James and Zacks rate the shares at outperform.

“We think ISRG's technology represents the leading edge in minimally invasive surgery and will continue to gain validity over time through use in a growing number and variety of surgical procedures, and published studies noting their safety,” Standard & Poor’s analysts wrote about the stock in late April.

“While we expect the capital equipment market in Europe to remain challenging in the near term, ISRG continues to sell its systems in Europe, and the number of da Vinci-based procedures, including prostatectomies, is growing strongly there.”

Intuitive Surgical next reports on July 19.

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Wednesday, 30 May 2012 10:05 PM
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