The da Vinci surgical system enables complex surgeries using magnified 3D high-definition vision and small instruments that bend and rotate far more than a surgeon's hand could. That means the da Vinci system helps surgeons operate with better vision, precision and control than they could on their own. Because of this advanced technology, each da Vinci surgical system costs $2.6 million! According to Modern Healthcare magazine, roughly 1,500 U.S. hospitals have installed a da Vinci surgical system since it came to market in 2000. Nevertheless, only a small fraction of total surgical procedures are currently performed using robotic systems, which is why Intuitive Surgical should be able to expand its market significantly over the coming years. The benefits are unmistakable... For instance, a robotic hysterectomy takes about three to four hours, includes only an incision near the belly button and (in many cases) is an outpatient procedure. And since robotic surgery is categorized as robot-assisted minimally invasive surgery, any insurance that covers minimally invasive surgery generally covers robotic surgery. Note: The estimated cost for a hysterectomy performed in a hospital ranges from $4,271 for a vaginal hysterectomy to $8,413 for a vaginal or abdominal hysterectomy with an endoscope. As you can see from the chart, Intuitive Surgical has come under pressure lately - either because its robotic procedures were delayed (or even postponed) due to the pandemic or due to overworked hospital staff or overcrowded facilities. Regardless, as this demand backlog starts to play catch-up, I believe the stock will recover. In fact, on February 4, Barron's senior writer Al Root called Intuitive Surgical one of the "six stocks to play the new U.S. economic reopening." YOUR ACTION PLANAs omicron infections trend lower, elective surgeries should begin to increase again, which could reaccelerate Intuitive Surgical's earnings. Its operating margins, currently around 30%, are about 10 points better than the average healthcare-equipment company's. With quarterly revenue growth of 17.17% during the pandemic, just imagine the growth Intuitive will see when hospitals get back to something closer to normal. Throw in the availability of COVID-19 pills and aging global populations, and the demand for robotic surgical procedures will only get stronger and stronger. This could be the best chance you ever get to buy Intuitive Surgical, so please - do not miss it. If you like this analysis and want more winning picks, sign up for our Trade of the Day Plus service. Click this link and check out our 83% win rate guarantee! |
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