Why Intuitive Surgical Shares Soared Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of robotic surgical device maker Intuitive Surgical (NASDAQ: ISRG  ) vaulted higher by as much as 11% following a better-than-expected fourth-quarter earnings report.

So what: Make that 15 straight quarterly beats! For the quarter, Intuitive, the maker of the da Vinci surgical system, reported a 23% increase in year-over-year revenue to $609.3 million, as income rose 16% to $4.25 per share. Wall Street had only been expected Intuitive to report a profit of $4.03 on $585.7 million in sales. Intuitive noted that procedure growth improved by 25% relative to last year, and saw healthy growth of 18% from da Vinci surgical system sales and 29% from instrument and accessories sales. Looking forward, the company guided to procedure growth of 20% to 23% in 2013.

Now what: Citron Research, who? OK, perhaps that was a little harsh, but I disagreed pretty strongly with their assertion last month that Intuitive's valuation was undeserved. With a veritable monopoly on the soft tissue market and a boatload of pricing power, there's little to stop it from double-digit growth for as far as I can see -- even with a European slowdown dragging on its results. This really is one of the few great growth companies out there and would recommend all growth-seeking investors at least give it a look or keep it on your watchlist.

Craving more input? Start by adding Intuitive Surgical to your free and personalized Watchlist so you can keep up on the latest news with the company.

Is this train about to leave the station?
If you want exclusive, members-only analysis of Intuitive Surgical, be sure to check out this brand-new premium report. A bearish research report has investors questioning the company's future, and analyst Karl Thiel recently released his exclusive take on the news. As one of the key minds behind our Rule Breakers recommendation of the stock in 2005 (before it went on to gain more than 1,000%), Thiel knows the Intuitive Surgical story inside and out. The report is a must-read for any current or prospective investor, and it comes with a full year of analyst updates. Be sure to claim your copy today by clicking here now.


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