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Will Intuitive Surgical (ISRG) Surprise in Q2 Earnings?

Intuitive Surgical Inc. ISRG is scheduled to report second-quarter 2017 results after the closing bell on Jul 20. Last quarter, the company’s earnings exceeded the Zacks Consensus Estimate by 17.63%. Also, the company delivered an average beat of 14.44% in the trailing four quarters.

Let’s see how things are shaping up for Intuitive Surgical prior to this announcement.

Factors at Play

We believe that the growing adoption of Intuitive Surgical’s da Vinci system among physicians for general surgery, oncology, urology and gynecology procedures is a key catalyst. Earlier, da Vinci procedures increased approximately 18% year over year in the first quarter of 2017. For the second quarter, the company expects procedure growth rate to slow down a bit outside the U.S. The company anticipates full-year 2017 procedure growth within 12% to 14%. Full-year 2017 gross profit margin is expected in the upper end of the range of 69% to 71% of net revenue.

Moreover, rising procedural volumes outside the U.S., particularly in Europe, fortifies the company’s market position. In fact, the integrated Table Motion product line has gained significant traction within a short span of time and is likely to boost the company’s top line in the to-be-reported quarter. Meanwhile, increased spending on product development and higher investments in expanding the company’s footprint in international markets are prudent moves to drive long-term growth in our view.

We note that Intuitive Surgical outperformed the Zacks Medical Instruments sub-industry in the last one year. While the stock has returned 41.11%, the sub-industry has gained only 10.08%.

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise

 

Intuitive Surgical, Inc. Price, Consensus and EPS Surprise | Intuitive Surgical, Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that Intuitive Surgical is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Intuitive Surgical’s Earnings ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at $4.86. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Intuitive Surgical has a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

Also, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:  

Thermo Fisher Scientific Inc. TMO has an Earnings ESP of 0.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dextera Surgical Inc. DXTR has an Earnings ESP of +9.09% and holds a Zacks Rank #2.

Telefex Incorporated TFX has an Earnings ESP of +1.06% and carries a Zacks Rank #2.

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Thermo Fisher Scientific Inc (TMO): Free Stock Analysis Report
 
Teleflex Incorporated (TFX): Free Stock Analysis Report
 
Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report
 
Dextera Surgical Inc. (DXTR): Free Stock Analysis Report
 
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