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Intuitive Surgical Shares Surge After 1Q Financial Results and Slew of Analyst Upgrades

Kyle DennisKyle Dennis ·

Intuitive Surgical Inc (NASDAQ: ISRG) shares were up over 6% today, after it reported its 1Q 2017 financial results and analyst price target raises. Intuitive Surgical raised its FY 2017 procedure growth review to a range between 12% and 14%. Let’s get right into the company’s financial results.

Intuitive Surgical 1Q 2017 Financial Results

Intuitive Surgical reported an adjusted 1Q 2017 EPS of $5.09 on revenue of $674M. Its EPS topped the Thomson Reuters estimate of $4.93. Additionally, its revenue beat the consensus estimate of $669.7M. ISRG’s revenue grew by 13%, when compared to its revenue of $595M for 1Q 2016. The company’s net income of $196M was an increase of over 15% year over year. Moreover, the company was able to grow its non-GAAP EPS by over 15% year over year.

Intuitive Surgical’s worldwide da Vinci procedures grew by nearly 18%, when compared to 1Q 2016, which was primarily driven by the growth rate in the U.S. general surgery procedures and worldwide urologic procedures.

Intuitive Surgical President and CEO Dr. Gary Guthart stated, “We are pleased with broad-based da Vinci procedure growth during the first quarter and are encouraged by trends in key global markets and our U.S. general surgery business. Consistent with our mission, we strive to make surgery more effective, less invasive and easier on surgeons, patients and their families by actively engaging hospitals and surgical teams.”

The company also raised its FY 2017 procedure growth view to a range between 12% and 14%, up from its previous range between 9% and 12%.

After the company’s earnings and revenue beat, Barclays raised its price target to $870, from $830, due to the company’s procedure growth during the first quarter of 2017. Moreover, Citi analyst Amit Hazan raised his price target on ISRG to $917, from $820, after the company’s earnings results. Wedbush reiterated its Outperform rating on Intuitive Surgical and raised its price target to $835, from $800.

Intuitive Surgical Performance

The stock traded between  $790.98 and $817.20 today. ISRG traded between  $610.71 and  $817.20, over the past 52 weeks. After the company released its 1Q 2017 financial results and received some analyst upgrades, ISRG made a new 52 week high. After today’s performance, the stock is up just over 19% over the past three months, and over 23% year to date.

Take a look at ISRG’s performance on the daily chart:

Source: Investing.com

If you look at the chart, ISRG gapped above its 20-day simple moving average, and is currently trading over 7% above its 50-day SMA, and it’s well above its 200-day SMA.

From a value standpoint, when compared to its industry average, ISRG may be considered overvalued. The stock’s price-to-book ratio and trailing 12-month price-to-sales ratio were above the industry average. However, its trailing 12-month price-to-earnings ratio is still slightly below the industry average, according to Morningstar.

Final Thoughts

ISRG made a new 52-week high today, after its 1Q 2017 financial performance and analyst price target raises. Now, if the company reports earnings and multiple firms raise their price target on the stock, this should drive the stock higher. We saw this with ISRG today.

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