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Intuitive Surgical, Inc. Message Board

  • osulinn osulinn Aug 2, 2010 5:04 PM Flag

    Price to sale ratio = 10


    This fact can not be denied...

    Upside is limited...

    This topic is deleted.
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    • <Price, price, price. 15B market cap. That is very expesive. When the sale is only 1.5B.>

      Gee, what did J&J pay for Ethicon when they bought them, ~15X sales.
      Gee what did Cardinal Health pay for Chloriprep(tm), ~16X sales.
      What did Merck pay for Schering-Plough? Take a wild guess.
      What did Disney pay for Pixar, anyone, anyone, Buller, buller?

    • fish_discover_water_last fish_discover_water_last Aug 2, 2010 10:16 PM Flag

      As I pointed out in a previous post the analyst consensus for ISRG EPS growth THIS year (2010) was only 20% in January. It has been repeatedly raised as it has been every other year. Most recently to 46%+ and will likely be raised again before the year is out.

      $250 is unlikely without a broader market crash, $150 would require another Lehman Bros style set of collapses.

    • Again, sales don't exist in a vacuum. Look at the 73% margins. Look at the cash flow, it's on track to be $800 million this year, about $20/share.

      Now the growth you're considering is 49% by your own calculations. So I guess I am considering it.

    • The only reason that the upside is limited as you see it is that you are driving with your eyes glued to the rear view mirror. However, if you are in fact looking forward, I suspect that you cannot see beyond the tip of your nose. Either way, it is not a good omen for your future success as an investor.

    • The 73% margins support that ratio. What's your point?

    • Where have you seen anyone denying that? The PE is 42 too. We're not denying that either. what we are denying (and the analysts agree) is that they will turn in 10% YOY growth for 2011.

      If as you predict ISRG turns in 49% EPS growth for 2010 we will have no trouble sustaining the current PE or P/S ratio. The continuing growth and future prospects will make sure of that just as they did last year.

      Imagine that we were having this conversation at this same point last year. The PE would have been even higher 45 and you would have been predicting the same thing. That the PE was going to plunge because the PE could not stay that high and that sales growth was going to fall off a cliff. Their EPS growth for 2009 vs 2008 was only 16% and yet here we are in 2010 and your very own estimate calls for 49% EPS growth and the PE is over 42.

      Yo have no credible argument for why earnings growth should fall from 49% in 2010 (your own estimate) to 10% in 2011.

686.45+0.86(+0.13%)Aug 25 4:00 PMEDT