$288.66
1.02 (+0.35%)
Intuitive Surgical, Inc. (ISRG)
CAPS Rating:
Manufacturer of da Vinci Surgical System, an advanced surgical system that provides the surgeon with range of motion and fine tissue control, previously possible only with open surgery while also allowing the surgeon to work through small ports.
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Let's face some facts. We are in the middle of the worst economic mess since the great depression, and the second worst in well over 100 years. In comparison to what we normally see, this will not be a good quarter. Expectations are low, but I don't have a clue whether or not ISRG will beat or miss them. If I had to bet, I'd bet they will beat them given management's past effectiveness in managing the street's expectations down. But other than for traders (and maybe for buy points for investors) it doesn't matter.
Three things will matter a lot, and I expect we will see results better than expectations on all of them:
1. Number of procedures. Procedures grew 60% in 2008 and 61% in Q4 2008. Given the economy, anything over 50% for this quarter would have to be considered a home-run. However, given awareness, adoption a patient preference rates, I expect we will be closer to 60% than to 50%
2. Recurring revenue growth. Recurring revenue grew 51% in 2008 and 46% in Q4. Again given the economy, anything over 40% would be a home run. This is a harder call, but I'm still going for closer to 46% than 40%.
3. Systems in the purchasing pipeline. Q4 conference call said this remained strong. With the patient demand dynamics, I expect this will remain strong. And given the 22 open listings for US sales people (4 more in Europe), I think the company sees this as well.
You must be a young one....lol. This economic downturn is not the worst since the great depression, not even close. The 70's were way worse than the conditions we have today, higher interest rates, higher inflation, way higher unemployment, negative growth. As an economist, I get frustrated that comparisons are made the the GD and stated as facts when in fact, nothing could be further from the truth. We have some things that were way different in this downturn then we have ever had before 1) 24 hour news coverage 2) financial instruments that really didn't have a good risk/pricing mechanism and fueled much of the growth due to in part "paper profits and growth 3) an extended growth period since the 80's without significant and 4) politicians that are far more concerned with making themselves look good than trying to provide real, long term solutions. This downturn will take some time to work through because in part we don't know how unwinding some of this will affect other parts of the economy. However, one thing I know for sure, having lived through the 70's which was disastrous for almost every single class of American, we will survive and thrive again and the impacts of this downturn will be felt not nearly as long as that recession and decade.
Having said that, I agree with your analysis of this stock. I just think we have run up a little too far, too fast or I would likely be green thumbing along with you.