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Intuitive Surgical, Inc. Message Board

  • aggregation2000 aggregation2000 Oct 21, 2009 10:40 AM Flag

    Why the stock is falling

    If you believe Yahoo's estimate, what we have is a current PE of 47 vs. an annual earnings growth rate of 24.

    Net-net we have a good company that is currenly overpriced. Therefore, the price still has to settle down a bit more.

    My best guess, short term is in the 140 to 145 level and long term (>1 yr) 175 - 185.

    Good luck..............

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    • fish_discover_water_last fish_discover_water_last Oct 21, 2009 11:17 AM Flag

      Certainly a reasonable position. Thank you for sharing it and for providing your thinking.

      The market appears to be giving ISRG credit for the 47%+ procedure growth they are expected to have this year.

      I completely understand why a skeptic would not just take that growth rate as the critical one. On the other hand, it can not be ignored either. This not only represents ACTUAL revenue growth from instruments and accessories but also an ACTUAL increase in the end user demand for their product. As utilization of the existing base gets squeezed some portion of this will necessarily have to translate into incremental system sales in the fairly near future. There is some indication that is already happening. This is of course unless hospitals start turning away patients who are looking for robotic surgery in which case some other hospital that has excess capacity or is willing to purchase an additional machine will be happy to accommodate them.

      This qtr 37 of the systems went to hospitals that already had them. 20 of those were upgrades but the othe 17 represented hospitals that had reached their capacity or were expanding into other specialties. It's also possible but less likely that they purchased additional systems for training purposes

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