Why Intuitive Surgical, Inc. (ISRG) Might be Well Poised for a Surge
Intuitive Surgical, Inc. (ISRG) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Intuitive Surgical, Inc. There has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The earnings estimate of $3.47 per share for the current quarter represents a change of +25.27% from the number reported a year ago.
The Zacks Consensus Estimate for Intuitive Surgical, Inc. has increased 14.32% over the last 30 days, as four estimates have gone higher while one has gone lower.
Current-Year Estimate Revisions
The company is expected to earn $14.35 per share for the full year, which represents a change of +41.24% from the prior-year number.
The revisions trend for the current year also appears quite promising for Intuitive Surgical, Inc. with four estimates moving higher over the past month compared to one negative revision. The consensus estimate has also received a boost over this time frame, increasing 14.5%.
Favorable Zacks Rank
The promising estimate revisions have helped Intuitive Surgical, Inc. earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
Intuitive Surgical, Inc. shares have added 7.5% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
