Is Intuitive Surgical a Good Investment?

PHOTO CREDIT: Intuitive Surgical

OVERVIEW

Intuitive Surgical Incorporation is a company based in the United States. The company designs, manufactures, and sells medical devices around the world. The company sells its own line of surgical robots, labeled the da Vinci Surgical System in addition to many other similar devices. The company also offers replacement parts as well as training and repair services for these devices. The company was founded in 1995.

Why You Should?

1. Robots are the future of the surgical industry. This allows hospitals to conduct these procedures in a cheaper and more efficient environment. Robots also make these procedures much more successful as well. New trends will cause a rise in the demand for the products and services that the company offers. This will benefit the company and its investors in the future.
2. Intuitive Surgical has continued to innovate for the future. Not only is the company improving its product lines but it is also offering new capabilities, services, and products to its customers around the world. This will further increase the demand for the company’s products. This innovation will benefit the company’s investors in the future as well.
3. Intuitive Surgical offers a wide range of products and services which offers the company with multiple streams of recurring revenue. For example, the company sells machines and also the services and parts required to operate that machine. This has benefited the company in the past and will continue to benefit the company and its investors in the future.
4. The company has reported rising revenues and profits over the past couple of financial years due to the reasons mentioned above. However, the company was hurt by the pandemic which caused a drop in both revenues and profits in the most recent financial year. This will benefit the company’s future growth and will also benefit investors in the company. In the financial year of 2019, the company reported revenues of around 4.48 billion and profits of around 1.38 billion. Both of these metrics are higher than what the company reported in the financial year of 2018 when they had revenues of around 3.72 billion and profits of around 1.13 billion. However, in the financial year of 2020, the company reported a drop in both revenues and profits due to the negative impacts from the COVID-19 pandemic. In this year, the company reported revenues of around 4.36 billion and profits of around 1.06 billion.

PHOTO CREDIT: Yahoo Finance

Why You Should Not?

1. Intuitive Surgical faces tough competition from many other large medical device companies around the world. Some of these companies include Johnson & Johnson, Medtronic, and Stryker. This competition might hurt the company and its investors in the future.
2. The COVID-19 pandemic has hurt the company and its investors. This is because cash-strapped hospitals and the stoppage of non-required surgeries have hurt the sales of the company’s products. These impacts will only be short to mid-term issues and the company will return to strong growth once this pandemic is over.

MY OPINION

I think that Intuitive Surgical is a great long-term investment due to its position as a good growth play in an investor’s portfolio, good innovations for the future of the surgical industry, a wide range of products and services, as well as rising revenues and profits. However, tough competition and impacts from the pandemic might hurt the company in the future.