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What to look for in the upcoming Intuitive Surgical earnings report

Intuitive surgery (NASDAQ: ISRG) is a pioneer and a leading manufacturer of robotic surgical devices. Its da Vinci Surgical Systems allow physicians to perform a wide range of complex procedures using minimally invasive techniques, promoting better patient outcomes.

Last year, the company faced headwinds from the pandemic as non-essential procedures were rescheduled and healthcare facilities cut spending on new equipment. In this Backstage Pass video, which was broadcast September 29Motley Fool contributor Brian Withers shares his thoughts on Intuitive Surgical, outlining metrics investors should watch for when the company releases its third quarter results later this month. The company is expected to release its results on October 19.

Brian Withers: For those unfamiliar with Intuitive Surgical, consider surgery and robots, giving surgeons much finer, less invasive movements for patients. These guys have been working on it for a long time, they are absolutely the market leader in this area.

They predict revenue growth from procedures, and it’s been an interesting couple of years for Intuitive Surgical as a lot of surgeries are scheduled and can potentially be postponed, so hospitals with a rush of coronavirus patients, the growth procedures for Intuitive Surgical slowed down. down and I think it even went negative for a quarter. When they talk about procedural growth, that’s important to Intuitive Surgical because not only do they sell robots, but think of the razor and blade model, they sell the accessories that go on robots that were single-use and that you wouldn’t want to use them for multiple patients. Growing procedures growth from 27% to 30% is a good track for healthy growth, and they predict it. FY is for the full year. Analysts are forecasting revenue growth of around $ 1.4 billion, their revenue for the quarter, which is 43% from last year, but for two-year growth, if you look at it. 2019 forward over two years, that’s a compound growth rate of 11%, and the bottom line is not growing as fast.

I imagine Intuitive Surgical sees some of the cost issues we’ve talked about with all of these manufacturing companies. I think it’s a possible beat on the top line. Over the past two quarters, they have seen two-year growth rates in the 15 and 16 percent range. If they’re doing anything better than an 11% two-year growth rate, which they possibly could – if you look at last year’s quarterly increases from Q2 to Q3, you’ve seen that happen – it is entirely possible that they can beat the top line.

I’m also interested in an update on the growth of procedures. There are a lot of moving parts here, the Delta variant is wreaking havoc and, again, filling hospitals and intensive care settings, so it will be interesting to see where the growth in procedures lands. Especially since the procedural growth figures they display here were for the upgrade to the previous quarter’s forecast. This is a higher number than expected by management. For long-term viewers, you want more systems placed.

Ion is their single port unit, they are one of their newer robots, as well as global placements, and they are working on more flexible payment terms to bring these expensive robots to hospitals and then use them again and again. Again. . System placements are a very good leading indicator of how the business is going to perform over the next several years, and it’s always an exciting number to watch.

The action beat the market. But as you can see, it’s really interesting looking at all of these graphics next to each other. Intuitive is a bit more volatile than some of the others we’ve seen. True, he dragged the market here and there, significantly [laughs] surpassed it, then recently, as tech stocks pulled back, they pulled back slightly, but it’s certainly a strong market beater over the past year or so. Then if you look at an even longer window, a stock that beats the market over the long term.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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