What happened
Shares of the robotic surgery giant Intuitive Surgical (ISRG -0.55%) rose by as much as 14% on heavy volume in early morning trading Wednesday. The medical device company's shares have pulled back to a degree since that red-hot start, but they were still up by a healthy 9% as of 1:36 p.m. ET.
What fueled Intuitive's northward move? After the closing bell Tuesday, the company released its third-quarter results, which topped Wall Street's consensus estimates on both the bottom and top lines.
So what
Intuitive Surgical reported revenue of $1.56 billion for Q3, an 11% increase compared to the same period a year ago. Wall Street, by contrast, was expecting revenue to come in at $1.52 billion. On the bottom line, it posted adjusted earnings of $1.19 per diluted share, beating analysts' consensus estimate by a healthy 4.3%.
Intuitive's management attributed these stronger-than-expected financial results mainly to a sizable uptick in the number of procedures performed using da Vinci systems during the quarter. The company noted in its press release that robotic surgery procedures were on the rebound after the COVID-19 pandemic led to many surgeries being postponed or skipped in the past two years.
Now what
Is Intuitive Surgical's stock a buy based on these upbeat results? I think so. The company is expected to return to healthy levels of top-line growth now that hospitals no longer need to reserve such large portions of their resources for treating COVID-19 patients, and people are largely feeling less worried about the prospect of contracting the coronavirus during a hospital stay. In 2023, for example, the robotic surgery specialist is forecast to post a whopping 12.4% increase in annual revenue. Not many blue chip stocks can offer that kind of blistering revenue growth on an annual basis.
