ISRG - Stereotaxis: Replacement Cycle Timeline Drives Prudent Guidance Creates Compelling Opportunity

• Solid Q4 beat overshadowed by prudent guidance that removes 4 "imminent" replacement system sales from FY2022 outlook. As per quarterly call, all have physician/administration support and remain “imminent”.
• Timing of closing the 4 "imminent" replacement sales will determine whether they're FY2022 or FY2023 revenue. Either way they'll be, revenue and >30% pullback seems excessive.
• Return on multi-year R&D spending uptick beginning to show via Genesis sales leading to 32% growth in FY2021, with proprietary catheters, guidewires, connectivity platform, and mobile RMN system to follow.
• Pipeline of >24 “high-likelihood capital projects globally reflecting good mix of both greenfield and replacement” Genesis system sales is a level of demand Stereotaxis hasn’t experienced in years.
• Balance sheet strong with $40 million in cash & no debt. Barring one-time cost for new headquarters & 3-fold manufacturing increase, negative FCF was just $1.8 million in FY2021.

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