Tuesday, July 9, 2013

Investopedia: Intuitive Surgical's Miss Looks Systemic And Company-Specific

It wasn't so long ago that Intuitive Surgical (Nasdaq:ISRG) was one of the cleanest growth stories in med-tech, as hospitals seemingly couldn't buy the company's surgical robots fast enough. Not only did Intuitive's daVinci robot come to all but dominate the prostatectomy market, but it was well on its way to taking significant share in hysterectomy as well.

Then the bad news began. From reports of surgical complications to multiple papers alleging that robotic surgery is not cost-effective, the news flow turned decidedly negative even as procedure counts continued to grow.

Now we have a major quarterly earnings miss to digest. While there are enough rumblings out there to suggest that it's not a solely Intuitive-specific issue and the procedure growth numbers still look decent, it looks this highly-valued stock is going back into the penalty box. I do believe Intuitive continues to offer above-average growth in the med-tech space, though, and the reality is that this stock only seems to get cheap when the news flow gets pretty scary.

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