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 B+ . 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, good cash flow from operations and expanding profit margins. 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 came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 20.4%. 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 4.05, which clearly demonstrates the ability to cover short-term cash needs.
- INTUITIVE SURGICAL INC has improved earnings per share by 46.2% 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).
- Net operating cash flow has increased to $214.00 million or 41.16% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 10.33%.
- The gross profit margin for INTUITIVE SURGICAL INC is currently very high, coming in at 75.40%. Regardless of ISRG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ISRG's net profit margin of 34.08% significantly outperformed against the industry.
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. Intuitive Surgical has a market cap of $20.62 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 32.4, above the S&P 500 P/E ratio of 17.7. Shares are up 5.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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