Investopedia: Better Budgets, Better Times For Robots

The healthcare capital equipment market is slowly getting better, as hospitals are starting to pick up spending in the wake of the budget lockdowns forced by the credit crisis and recession. Not only is that good news for major imaging system companies like General Electric (NYSE:GE) and radiology companies like Varian (NYSE:VAR), but also for the burgeoning field of surgical robotics. 


Intuitive - Biggest and Best, But Not Home-Free
The go-to name in surgical robotics has pretty much always been Intuitive Surgical (Nasdaq:ISRG), and the company has been exceptionally successful in placing its da Vinci robots in surgery centers around the world. Revenue has rocketed from $227 million in 2005 to over $1.4 billion last year, and the company has established a very profitable recurrent business model.

The challenge for Intuitive is what comes next. Intuitive has done a great job of advertising the benefits that da Vinci can bring to procedures like prostatectomies and hysterectomies, and the company has a strong position in urology and gynecology. The trouble is, Intuitive's shareholder base is ravenous when it comes to demanding growth, and Intuitive needs to start proving that its long-held promise in markets like colorectal, thoracic and cardiology can actually bear fruit. Success will mean hundreds of millions of dollars more in recurrent revenue, but investors will not wait forever.


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