With half of 2012 in the record books, it's important to take a look at whether the stocks that interest you can live up to their full potential. By making sure you know about a company's future plans and possible challenges, 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
Stats on MAKO Surgical
|Average Stock Price Target||$21.83|
|2012 EPS Estimate||($0.77)|
|2013 EPS Estimate||($0.42)|
|Fiscal 2012 Sales Growth Estimate||31%|
|Fiscal 2013 Sales Growth Estimate||40.3%|
|CAPS Rating (out of 5)||*****|
Source: Yahoo! Finance.
Will MAKO Surgical ever heal?
MAKO is a classic example of a high-growth stock that got ahead of itself. When you ignore the stock price and just look at the company, it's hard to argue that MAKO doesn't have a lot going for it. With demographics on its side and with Intuitive Surgical
But the company has demonstrated twice now that it can't give investors the growth trajectory they'd like to see. Whether it's because hospitals are reluctant to turn away from traditional implants from veterans Zimmer Holdings and Stryker
The main problem MAKO has right now is that it has completely lost credibility with its sales estimates. Having cut guidance on unit sales two quarters in a row, MAKO will have to prove its new numbers are more accurate than the old ones before investors start feeling confident about the company's prospects. With former sales VP Stephen Nunes out, the company may be able to convince big hospital corporations HCA
As analysts' target stock price suggests, it's not realistic to expect MAKO's shares to triple and regain all of their losses. But given enough time, the company could still prove to investors that its innovative technology can make money. The question is whether the company will have enough time to get the job done.
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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Intuitive Surgical, MAKO Surgical, and Zimmer Holdings. Motley Fool newsletter services have recommended buying shares of Stryker, Intuitive Surgical, and MAKO 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.