Intuitive Surgical (ISRG) is one of the most interesting companies I have ever followed. The maker of the da Vinci Surgical System has revolutionized many surgical procedures in healthcare. These days, though, the stock isn’t exactly healthy itself. After being under the weather, which is a way of saying that short-sellers were attacking it, the fundamentals finally slipped, with the company reporting a terrible Q2 and dramatically lowering its outlook. The stock has fallen from an all-time high of 595 in early 2012 and a recent high of 586 earlier this year to as low as 357 following the bad news. I have been following this company closely for almost a decade, and, while I am not a doctor, my prognosis is that ISRG will recover from these challenges. I expect that ISRG can recapture almost half of its losses over the next year and am forecasting a one-year price target of $468.
ISRG, based in Silicon Valley, is the leading robotic surgery company in the world and is now on its third generation console, the da Vinci Si, which surgeons use to improve their procedures. The benefits of its minimally invasive surgery, which has replaced traditional “open” surgery and laparoscopic procedures, are more precision, which leads to less blood loss, less pain, and fewer complication, all of which help patients. Hospitals benefit because patients get out of the hospital more quickly. Doctors like it because they are more productive. For many types of surgeries, it has become the “gold standard”.