Please ensure Javascript is enabled for purposes of website accessibility

Why TransEnterix Is Soaring Today

By Brian Feroldi – Updated Apr 14, 2019 at 4:36PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares jumped after the company provided investors with a slew of positive updates. Here are the key takeaways for investors.

Check out the latest TransEnterix earnings call transcript.

What happened

After it provided investors with a preliminary look at its fourth-quarter results, shares of TransEnterix (ASXC 5.58%), a commercial-stage medical device company focused on robotic surgery, rose as much as 12% in early-morning trading on Monday. Shares were up about 9% as of 11:06 a.m. EST.

So what

Here are the key takeaways from the update:

  • TransEnterix sold five Senhance Systems (robotic aids for surgeons) in the fourth quarter. One sale was in the U.S. and four sales were in international markets.
  • It expects revenue to come in at $7.4 million. That is slightly ahead of the $7.35 million analysts were expecting.
  • The Taiwanese government approved Senhance System instruments for sale during the quarter.
  • The company launched its Ultrasonic Instrument System in Europe during the quarter.
  • Cash balance at year end was $73 million.
  • TransEnterix has agreed to acquire MST Medical Surgery Technologies, an Israeli company focused on a software-based image analytics platform used during surgery. The terms of the deal were not disclosed.

Zooming out to the full year, TransEnterix sold 15 systems and expects to record $24 million in total sales.

Doctors Performing Surgery

Image source: Getty Images.

TransEnterix's CEO, Todd Pope, stated that "2018 was a significant year for TransEnterix as we continued to drive the global commercial adoption of the Senhance System and made great strides toward expanding the applicability of the system to a greater number of surgeons and hospitals across the globe. We view 2019 as an opportunity to leverage the tremendous progress we made in 2018 and bring the benefits of Senhance Surgery to more patients, surgeons and hospitals both in the U.S and internationally."

Traders are cheering the upbeat fourth-quarter results. 

Now what

2018 was an up-and-down year for investors. Shares soared during the first half of the year thanks to better-than-expected demand for its Senhance System. However, the share price came crashing back to earth after short-sellers took aim at the company in the fourth quarter.

Today's update should give bulls some confidence that the company remains on the right track. However, this Fool still believes that the company is too risky to touch, so I'm content to watch this story unfold from the safety of the sidelines.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.