Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 26.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ISRG has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.43, which clearly demonstrates the ability to cover short-term cash needs.
- INTUITIVE SURGICAL INC has improved earnings per share by 28.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INTUITIVE SURGICAL INC increased its bottom line by earning $12.30 versus $9.47 in the prior year. This year, the market expects an improvement in earnings ($14.83 versus $12.30).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 31.9% when compared to the same quarter one year prior, rising from $117.40 million to $154.90 million.
- Powered by its strong earnings growth of 28.86% and other important driving factors, this stock has surged by 47.55% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries. The company has a P/E ratio of 36.1, above the average health services industry P/E ratio of 35.6 and above the S&P 500 P/E ratio of 17.7. Intuitive Surgical has a market cap of $20.02 billion and is part of the
industry. Shares are up 9.6% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.