Intuitive Surgical (NASDAQ:ISRG) is in a business that sounds like it comes straight from a science fiction novel: Surgical robotics. However, luckily for patients around the world, this revolutionary technology isn’t only possible, it’s becoming more and more integrated into everyday hospital use.
Intuitive Surgical got its big break in 1999 when it introduced the da Vinci surgical system. Complete with a surgeon’s console, a patient-side cart, a 3-D vision system and wrist instruments, it allows doctors to perform minimally invasive surgery with enhanced dexterity, precision and control. In the end, this technology benefits the patients, who usually experience less pain, a shortened hospital stay, fewer infections and less scarring.
Just over a decade later, Intuitive has developed several models of this surgical system and even offers a training program that brings surgeons up to speed on it. This neat system has steadily caught on in the health care industry: To date, more than 1,450 academic and community hospitals have installed at least one da Vinci surgical system.
Now is the perfect time to buy this stock. Over the past 12 months, Intuitive Surgical has firmed up its fundamentals considerably, and buying pressure has gone through the roof. As to be expected with any of my new buy recommendations, Intuitive Surgical is now a heavy-hitter in the Medical Appliances and Equipment industry. In an industry with just under 200 companies, this one is at the top in terms of market cap, return on equity, price/earnings, earnings growth and sales growth.
However, I expect that Intuitive Surgical has plenty of upside left. For 2012, analysts expect it will increase earnings by 25.2% — over double the 11.7% rate expected for the industry. The Street also predicts 17.5% sales growth in 2012.
Intuitive Surgical is slated to announce Q4 earnings on Jan. 19. Currently, the analyst community expects sales to increase 24.3% to $483.74 million and earnings to climb 9.9% to $3.32 per share. The company has an extremely strong earnings surprise history, so I expect another big upside surprise. This gives you ample reason to buy ahead of this announcement.