What’s Happening With Intuitive Surgical Stock?

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ISRG: Intuitive Surgical logo
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Intuitive Surgical

[Updated: Jan 12, 2022] ISRG Stock Decline

Last month we discussed that the stock price of Intuitive Surgical (NASDAQ: ISRG) is likely to see higher levels based on the stock’s historical performance, but it appeared to have limited upside. ISRG stock rose from levels of around $340 on Dec 9, 2021 to $360 earlier this month, before cooling off to levels of $328 currently. ISRG stock is now down 5% over the last one month while it has dropped 7% over the last week. The recent fall can be attributed to rising Covid-19 cases worldwide, with the spread of newer variants. The seven day average of new Covid-19 cases in the U.S. stood at around 761K on Jan 11, compared to just 85k toward the beginning of December. Just like the previous waves, a higher number of cases can overwhelm the healthcare services in certain geographies, resulting in postponement of elective surgeries, and obstruct the revenue growth seen over the recent quarters. These concerns have led to a decline in ISRG stock.

Now, given the recent dip, and going by our Intuitive Surgical Valuation of $361 per share, based on expected earnings of $5.00 on a per share and adjusted basis, and a P/E ratio of 72x (compares with 81x earnings multiple for ISRG seen as recently as late 2020), there is a 10% upside potential from its current levels of $328.

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But what about the near term, given that ISRG stock has seen a fall of 5% in a month? Going by its historical performance, there is still a good chance of a rise in ISRG stock over the next month. Out of 384 instances in the last ten years that ISRG stock saw a twenty-one day fall of 5% or more, 256 of them resulted in ISRG stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 256 out of 384, or about a 67% chance of a rise in ISRG stock over the coming month. See our analysis on Intuitive Surgical Stock Chances of Rise for more details.

While ISRG stock may see higher levels over the next month, it is helpful to see how its peers stack up. Check out Intuitive Surgical Stock Comparison With Peers to see how ISRG stock compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving -7.5% or more over a five-day period, the stock rose in the next five days on 47% of the occasions.
  • After moving -10.0% or more over a ten-day period, the stock rose in the next ten days on 51% of the occasions
  • After moving -4.9% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 67% of the occasions.

This pattern suggests that there is a higher chance of a fall in ISRG stock over the next five days, but higher chances of a rise over the next ten days and one month period.

Intuitive Surgical (ISRG) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: BDX highest at 4.0%; ISRG lowest at -7.5%
  • Ten-Day Return: BDX highest at 4.6%; ISRG lowest at -10.0%
  • Twenty-One Days Return: BDX highest at 6.8%; ISRG lowest at -4.9%

Below you’ll find our previous coverage of ISRG stock where you can track our view over time.

 

[Updated: Dec 9, 2021] ISRG Stock Update

The stock price of Intuitive Surgical (NASDAQ: ISRG) has seen a rise of over 6% over the last five trading days. However, despite the recent rise it is still down 7% over the last one month period. The fall earlier was led by concerns over the new Covid-19 variant – Omicron – and its impact on the overall economic growth, and the healthcare sector. However, over the recent days, some reports have emerged stating that the impact of Omicron on the overall economic growth may not be as profound as earlier anticipated. [1] This resulted in a rebound in the broader markets, including ISRG stock. In fact, in our previous update (below) we stated that the stock has a higher chance of a rise in the near term, based on ISRG’s own historical performance.

Looking forward, there is only a little room left for growth in ISRG stock, in our view. Going by our Intuitive Surgical Valuation of $361 per share, based on expected earnings of $5.00 on a per share and adjusted basis and a P/E ratio of 72x (compares with 81x earnings multiple for ISRG seen as recently as late 2020), there is only a 6% upside potential from its current levels of $341. In fact, the $357 estimate as per average of analyst forecasts, reflects an even lower <5% upside from the current levels, pointing out that ISRG stock is nearly fully valued currently, and investors may be better off waiting for another dip for better gains in the long term.

But what about the near term, given that ISRG stock has seen a fall of 7% in a month? Going by its historical performance, there is still a good chance of a rise in ISRG stock over the next month. Out of 248 instances in the last ten years that ISRG stock saw a twenty-one day fall of 7% or more, 161 of them resulted in ISRG stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 161 out of 248, or about a 65% chance of a rise in ISRG stock over the coming month. See our analysis on Intuitive Surgical Stock Chances of Rise for more details.

 

[Updated: Nov 29, 2021] ISRG Stock Decline

The stock price of Intuitive Surgical (NASDAQ: ISRG), a fast growing robotic surgical devices company, has seen a 7% fall in a month, while it was down nearly 6% just last week. This can largely be attributed to a broader sell-off in the markets with the S&P500 falling over 2% following the reports of a new variant of the Covid-19 – Omicron – which has 32 mutations in the spike protein – the part of the virus that Covid-19 vaccines target. WHO declared Omicron to be a variant of concern. Overall, the markets were looking forward to the ramp up in demand and opening up of economies, but now, there are looming concerns of more restrictions. In fact, many countries in Europe are now looking at increased restrictions, and Austria is going with a partial lockdown since last week, and moving forward with a vaccine mandate.

Looking at Intuitive Surgical, a rise in the number of Covid-19 cases means more pressure on healthcare institutions, especially in certain geographies with limited resources. This will likely impact the total procedure volume, a trend seen in the recent past as well, with the spread of the Delta variant.

But now that ISRG stock has fallen 7% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a rise in ISRG stock over the next month. Out of 248 instances in the last ten years that ISRG stock saw a twenty-one day fall of 7% or more, 161 of them resulted in ISRG stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 161 out of 248, or about a 65% chance of a rise in ISRG stock over the coming month. See our analysis on Intuitive Surgical Stock Chances of Rise for more details.

So, if this follows the historical pattern, ISRG stock is likely to see higher levels. That said, the move in ISRG stock will also depend on the trend in U.S. Covid-19 cases. If the Omicron results in another large spike in total number of Covid-19 cases, it is likely that ISRG stock will actually see even lower levels, along with some of the other medical devices companies, as well.

Wondering how Intuitive Surgical’s peers stack up? Check out Intuitive Surgical Stock Comparison With Peers to see how ISRG stock compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving -5.6% or more over a five-day period, the stock rose in the next five days on 55% of the occasions.
  • After moving -7.2% or more over a ten-day period, the stock rose in the next ten days on 56% of the occasions
  • After moving -7.4% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 65% of the occasions.

Intuitive Surgical (ISRG) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: BDX highest at -1.4%; EW lowest at -6.4%
  • Ten-Day Return: BDX highest at 0.4%; BSX lowest at -8.3%
  • Twenty-One Days Return: BDX highest at 2.7%; BSX lowest at -10.7%

While ISRG stock may see higher levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for United Therapeutics vs Quest Diagnostics.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

Returns Jan 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 ISRG Return -12% -12% 351%
 S&P 500 Return -2% -2% 109%
 Trefis MS Portfolio Return -6% -6% 271%

[1] Month-to-date and year-to-date as of 1/13/2022
[2] Cumulative total returns since the end of 2016

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Notes:
  1. European markets head for positive open as investors watch omicron and U.S. jobs data, Holly Ellyatt, CNBC, Dec 9, 2021 []