Shares of Intuitive Surgical (ISRG) are down and out. For an update on why check out last quarter’s article on ISRG. Today I want to focus on the numbers right now. ISRG is a stock I origially purchased in the $20s and has treaded my investors well over the years. We don’t own the stock anymore, but I would be open to getting back in if the price was right. ISRG is on my radar.
After updating the data on ISRG this quarter, I think the shares are down and out for a while.
One Year Chart
ISRG’s estimated Long Term Growth Rate has dropped from 18% to just 12% this year. The shares have fallen out of bed, yet the P/E is still 22. 22 is pretty high.
Estimates show negative profit growth coming the next two quarters. Plus 2014 and 2015 estimates just got reduced for the second straight quarter. It looks to me like ISRG might not have any profit growth next year. No profit growth for 22 times 2014 estimates?
Fair Value
ISRG gets more than half its revenue from replacement parts for the da Vinci robotic doctor. This provides a steady stream of recurring revenue that the company can count on each quarter. This is valuable, and considering this I think ISRG is worth 24 times earnings. The stock has a limited upside to Fair Value of 9% for 2014.
Sharek’s Take
Intuitive Surgical is having problems growing right now, which would be fine if the stock was cheaper. But to get this company with issues we would have to pay more than 20 times earnings to get it. Upside is limited right now, I think ISRG is down and out for a while.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
