Intuitive Surgical: A Hidden Gem

Jul.23.09 | About: Intuitive Surgical, (ISRG)
  • Q2 EPS $1.62 vs expectations of $1.27
  • Revenue up 18.8 pct to $260.6 million

Intuitive Surgical Inc (NASDAQ:ISRG) reported second-quarter earnings on Wednesday that blew past Wall Street expectations, as instrument and accessories revenue jumped, sending its shares up more than 14 percent. The maker of the “da Vinci” robotic surgical system posted a net profit of $62.4 million, or $1.62 per share, compared with a profit of $51.2 million, or $1.28 per share, a year ago.

Intuitive Surgical Inc has been a top pick at Beyond Trading with a Strong Buy rating on the stock and a potential upside before earnings to $170. Beyond Trading recently recommended to its subscribers a long position on the stock at $143.3 also mentioned on's “StockTalk”.

“I consider Intuitive Surgical a Hidden Gem neglected by Wall Street analysts during the recent stock market turmoil”, said Sergio Vieira, President & CEO of our company, Beyond Trading Corporation.

We are firmly believers in the Da Vinci technology, which uses precision robotics to replace a surgeon's hand and has a history of excellent patient outcomes in a variety of cancer surgeries, representing a substantial capital expenditure for hospitals. The older model costs about $1.6 million each, while the newer version costs as much as $2.25 million each.

The company raised its 2009 procedure growth estimate to 45 percent from its previous forecast of 40 percent growth. It still sees 35 percent growth in service revenue for the year.

Lonnie Smith, Chairman and CEO of Intuitive Surgical, said, "We are pleased by our continued strong procedure growth and the positive market response to our new da Vinci Si system."

Intuitive ended the second quarter of 2009 with cash, cash equivalents and investments of $902 million, up $80 million from the previous quarter.

We are upgrading our upside from $170 to $225 based on most recent company earnings report. We consider Intuitive Surgical a hidden gem neglected by Wall Street analysts.

Disclosure: No position in Intuitive Surgical; recently recommended to subscribers at $143.3 on the long side