A key player in providing technological innovation to the surgical space, Asensus Surgical (NYSEMKT:ASXC) has been a hot stock for some time. Today, shares of ASXC stock are up well more than 20% at the time of writing as penny stock investors pile in.
Asensus Surgical is a company focused on pioneering “a new standard of surgery for increased control, less variability and consistently superior outcomes.” The company’s offerings are aimed at integrating machine learning and automated intelligence to improve surgical outcomes. Specifically, Asensus’ focus is on laparoscopic surgical procedures.
Now, given the impact the pandemic has had on elective surgical procedures, investors are betting on a significant surge in demand materializing on the horizon. And today, some pretty bullish news came out supporting this thesis.
Let’s dive into what this news is, and why investors are betting on the surgical space today.
Strong Earnings from Peer Boost Hopes for ASXC Stock
Today, Asensus’ much larger peer, Intuitive Surgical (NASDAQ:ISRG) reported better-than-expected earnings during its recent report. Shares of ISRG stock are up more than 9% on the news.
Specifically, Intuitive reported earnings per share of $3.52 vs. consensus estimates of $2.63. Revenue came in at $1.29 billion vs. consensus estimates of $1.1 billion. This earnings beat was massive, and is indeed cause for optimism in this sector.
Now, Intuitive is one of the largest players in the surgical space. The company’s market capitalization is more than $100 billion, versus the $436 million market cap of Asensus. Thus, investors in Asensus follow how the leaders in this space perform closely.
Given Intuitive’s bellwether status in this space, it’s unsurprising to see today’s outsized move in ASXC stock. Additionally, Asensus has gained some popularity among retail investors of late, so higher volatility can be expected with this name in general.
Today’s 20%-plus gain is indeed significant. However, ASXC stock is still down approximately 70% from the peak of the speculative meme stock hysteria we saw earlier this year. Accordingly, I’d advise investors to practice caution with these volatile names today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.
