MDT - Intuitive Surgical: Great Company But Looking Overpriced
2024-03-19 06:34:48 ET
Summary
- Intuitive Surgical is a global technology leader in minimally invasive care and the pioneer of robotic-assisted surgery.
- I saw a 21% increase in sales for their flagship da Vinci procedures robot, which the company expects to continue.
- Revenue increased 17% to $1.9bn vs 2022 Q4, with a solid and stable gross margin of 66%.
- But it has a very high P/E and EV/EBITDA, and there are a few factors that make it look overpriced.
Intuitive Surgical, Inc. ( ISRG ) has been on a tear over the last 12 months, up 61% since March last year. Revenues rebounded in 2023 to $7.1bn with 14% YoY growth, driven by a 21% increase in procedure volume of their flagship da Vinci system. The company is also in an excellent financial position with $5.2bn in cash and zero debt. However, with a P/E of 78.8 and an EV/EBITDA of 62.4 it may be looking expensive , and there are a few warning signs that may not justify the high price-tag. I believe Intuitive Surgical is a hold at current prices, but I will be looking to buy if there is a pullback....
Intuitive Surgical: Great Company, But Looking Overpriced