Robotic surgery may sound like science fiction, but Intuitive Surgical
What Fools say:
Here's how Intuitive Surgical's CAPS rating stacks up against some of its peers and competitors:
Company |
Market Cap (billions) |
Trailing P/E Ratio |
CAPS Rating |
---|---|---|---|
Medtronic |
$60.0 |
27.3 |
**** |
Hitachi |
$24.2 |
N/A |
** |
Intuitive Surgical |
$11.0 |
67.7 |
**** |
Hologic |
$6.1 |
N/A |
***** |
Accuray Incorporated |
$0.4 |
80.0 |
**** |
Data taken from Motley Fool CAPS on 07/21/2008.
Yeah, those peers fall loosely into the "medical devices" category, rather than head-on competition. Thanks to a rock-solid patent portfolio and a years-long head start, Intuitive simply doesn't have any real rivals.
CAPS all-star RonChapmanJr loves Intuitive's international growth plans with "distributors in Australia, Canada, China, the Czech Republic, India, Italy, Japan, Korea, Romania, Saudi Arabia, Singapore, Spain, Taiwan, Turkey and the United Kingdom."
However, even Ron concedes that the P/E ratio is very rich -- a common complaint among the bears on this stock.
What management does:
All the margins are opening up wider and wider, as the installed base of da Vinci robots grows. Those machines need a steady stream of disposable supplies -- which Intuitive is happy to sell with fat profit margins.
12/06 |
3/07 |
6/07 |
9/07 |
12/07 |
3/08 |
|
---|---|---|---|---|---|---|
Gross |
66.5% |
66.6% |
66.5% |
67.6% |
69.0% |
69.3% |
Operating |
28.8% |
29.3% |
30.6% |
32.4% |
34.7% |
35.5% |
Net |
19.3% |
19.9% |
20.6% |
22.7% |
24.1% |
24.5% |
FCF/Revenue |
22.5% |
24.8% |
26.9% |
25.7% |
30.9% |
27.7% |
And there's nothing wrong with the growth trends, either.
Growth (YOY) |
12/06 |
3/07 |
6/07 |
9/07 |
12/07 |
3/08 |
---|---|---|---|---|---|---|
Revenue |
63.9% |
55.8% |
55.7% |
57.7% |
61.2% |
64.7% |
Earnings |
(23.5%) |
(18.2%) |
(5.9%) |
21.5% |
100.6% |
103.4% |
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says:
Robotic surgery is less invasive, and it gives the controlling surgeon greater precision and stability than any handheld scalpel could. Patients can recover faster and with less risk of complications. Patients walk away happier and healthier, beds will clear out quicker, and hospitals should see fewer malpractice lawsuits (spurious or not). Taken together, it's no wonder these machines have been selling so briskly.
When JPMorgan Chase
If Intuitive disappoints again (well, relatively speaking), my shares will get cheaper for a while, but you'll have an even fatter value pitch to swing at than you see right now. If not, the stock may never be this cheap again.