The Story Behind MAKO Surgical's Boom and Bust This Year

As we've hit the halfway point for 2012, now's a good time to look back at what's happening with the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at MAKO Surgical (Nasdaq: MAKO  ) . The medical equipment maker has joined the robotic surgery revolution, building a device that helps doctors perform hip and knee surgeries more efficiently. Yet with investors expecting so much growth from the stock, will the company be able to deliver for the long haul? Let's take a quick look at how the stock is doing so far this year.

Stats on MAKO Surgical

2012 YTD Return 1.6%
Market Capitalization $1.09 billion
Revenue, Most Recent Quarter $19.6 million
Year-Over-Year Revenue Growth, Most Recent Quarter 50.8%
Net Loss, Most Recent Quarter ($11.7 million)
CAPS Rating *****

Source: S&P Capital IQ, company reports.

Why has MAKO Surgical been so volatile this year?
A look at the chart above suggests that MAKO has had a smooth ride, but nothing could be further from the truth. The stock was up as much as 80% before plunging in early May on disappointing results in its first quarter.

MAKO definitely has plenty of potential. Intuitive Surgical (Nasdaq: ISRG  ) may have pioneered the robotic surgery space, but MAKO's own RIO surgical systems also hit at an area that is primed for big growth in the years to come. As an aging yet active population suffers more joint-related ailments, MAKO's equipment could see much higher demand. MAKO will pose an ever-larger threat to traditional orthopedic equipment makers Stryker (NYSE: SYK  ) and Zimmer Holdings (NYSE: ZMH  ) , which only sell implant devices themselves rather than the equipment that can actually perform a surgical procedure.

Unfortunately, MAKO's price requires faster growth than the company has produced lately. MAKO only sold six surgical systems in the first quarter, and that combined with guidance that had analysts questioning whether the company could miss estimates again in the future had the stock losing all its 2012 gains a couple of months ago. Still, the company is much further along than Hansen Medical (Nasdaq: HNSN  ) and its robotic catheter systems. If MAKO can get back on the right path with its equipment sales, it could recover its recent losses and resume its long uptrend in the near future.

MAKO Surgical still has plenty of risk in it, although at cheaper prices, it also has plenty of upside potential. If you'd rather look at prospects that aren't quite as speculative, let me invite you to learn about three smart long-term stock plays in the Fool's latest special report. It's yours for the taking and is absolutely free, but don't miss out -- click here and read it today.

Click here to add MAKO Surgical to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. The Motley Fool owns shares of MAKO Surgical, Intuitive Surgical, and Zimmer Holdings. Motley Fool newsletter services have recommended buying shares of MAKO Surgical, Stryker, and Intuitive Surgical. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

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12/31/1969 7:00 PM
MAKO.DL $0.00 Down +0.00 +0.00%
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