Is Intuitive Surgical Likely to Outperform in 2013?

With shares of Intuitive Surgical (NASDAQ:ISRG) trading at around $563.50, is ISRG an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement


Intuitive Surgical has exceeded expectations once again. This shouldn’t come as a surprise. Intuitive Surgical has a reputation for sandbagging, which is good news for investors. Q4 revenue came in at $609 million, which beat expectations of $587 million. This was also a 23 percent increase year-over-year. EPS came in at $4.35, which beat expectations of $4.04. Profit increased 16 percent year-over-year.

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The majority of this good news stems from the company’s da Vinci robotic surgical systems. For Q4, 175 units were sold compared to 152 units sold in Q4 one year ago. Procedures increased 25 percent. The largest increases were in gynecology and general surgery. Each da Vinci surgical system costs $1.5 million, and then there are parts that must be replaced after each use. If you’re not familiar with the da Vinci robot, it has robotic arms, cameras, and a remote-controlled console, which helps doctors perform surgeries with tiny incisions. Intuitive Surgical expects procedures with the da Vinci robot to increase 20 to 30 percent in the coming year. As always, there is a change that the company is sandbagging here.

Now let’s take a look at some important numbers for Intuitive Surgical.