Intuitive Surgical stock (NASDAQ: ISRG) has seen an 11% rise in a month, while it is up 14% in a week. This compares with a 2% fall for the broader S&P500 index in a month and a 2% rise in a week. The rise for ISRG can be attributed to solid Q3 performance, with revenue falling in line and earnings slightly above our estimates.
Intuitive Surgical’s Revenue rose 11% to $1.6 billion, driven by a solid 20% rise in global da Vinci procedure volume. The company’s installed base grew 13% y-o-y to 7,364. Although its adjusted EPS of $1.19 reflected no growth compared to the prior year’s quarter, it was comfortably above our $1.16 and consensus estimate of $1.12.
Intuitive Surgical did not only report upbeat results but also raised its outlook for the full-year 2022, with procedure growth now expected to be between 17% and 18%, compared to the prior guidance of 14% to 16.5%. We have updated our model to reflect the latest quarterly results, and we now estimate the 2022 adjusted EPS to be higher at $4.79, vs. our earlier estimate of $4.70. However, after the recent rise in ISRG stock, we don’t see any significant upside. We estimate Intuitive Surgical’s Valuation to be around $242 per share, which is just 11% above the current market price of $218. At its current levels, ISRG is trading at 46x forward earnings, compared to the last three-year average of 47x, implying that it has only a little room for growth.
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But what about the near term?
Now that ISRG stock has seen a rise of 11% in a month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is an equal chance of a rise or fall in ISRG stock over the next month. A move of 11% or more in a month for ISRG has occurred 215 times in the past ten years. Of those instances, 108 resulted in ISRG stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 108 of 215 or a 50% chance of a rise in ISRG stock over the next month. See our analysis of Intuitive Surgical Stock Chance of Rise for more details.
Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data
- After moving 14% or more over five days, the stock rose on 17% of the occasions in the next five days.
- After moving 10% or more over ten days, the stock rose on 40% of the occasions in the next ten days.
- After moving 11% or more over a twenty-one-day period, the stock rose on 50% of the occasions in the next twenty-one days.
This pattern suggests an equal chance of a rise or fall in ISRG stock over the next month, while it has a higher chance of a decline in the next five and ten days.
Intuitive Surgical (ISRG) Return (Recent) Comparison With Peers
- Five-Day Return: ISRG highest at 13.9%; BDX lowest at -0.4%
- Ten-Day Return: ISRG highest at 9.7%; BDX lowest at -1.2%
- Twenty-One Day Return: ISRG highest at 11.2%; BDX lowest at -5.2%
While ISRG stock looks like it has only a little room for growth, it is helpful to see how Intuitive Surgical’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
With inflation rising and the Fed raising interest rates, among other factors, ISRG stock has plunged 40% this year. Can it drop more? See how low Intuitive Surgical stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Biogen vs. AGCO.
|S&P 500 Return||3%||-22%||65%|
|Trefis Multi-Strategy Portfolio||2%||-25%||197%|
 Month-to-date and year-to-date as of 10/20/2022
 Cumulative total returns since the end of 2016