Over the last six months, Intuitive Surgical’s shares have sunk to $400.75, producing a disappointing 17.5% loss - a stark contrast to the S&P 500’s 13% gain. This might have investors contemplating their next move.
Given the weaker price action, is now a good time to buy ISRG? Find out in our full research report, it’s free.
Why Are We Positive on ISRG?
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
1. Long-Term Revenue Growth Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Intuitive Surgical grew its sales at a solid 16.4% compounded annual growth rate. Its growth surpassed the average healthcare company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Intuitive Surgical’s astounding 17.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Intuitive Surgical’s margin expanded by 7.5 percentage points over the last five years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Intuitive Surgical’s free cash flow margin for the trailing 12 months was 29.2%.
Final Judgment
These are just a few reasons why we’re bullish on Intuitive Surgical. After the recent drawdown, the stock trades at 35.5× forward P/E (or $400.75 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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