What am I missing on ISRG?

Discussion in 'Stocks' started by AAAintheBeltway, Apr 18, 2008.

  1. They beat on both bottom and top lines but stock is getting killed. Seems extreme for a sell the news type deal. What's going on here?
  2. ISRG will be a good buy. A bottom will be found. Scale in with 1/2 position and add on any more dips.
  3. I think the PE in historical terms was getting ahead of itself + the option premiums last night were indicating a 70 point move which we just got. I believe support is very near if not right around here.
  4. What are you missing? Everything relevant to this stock.

    1) earnings and revenues beat, but at a much lower % rate than previous earnings reports.

    2) stock was at a strong double top

    3) nothing goes up forever

    4) Bob Rowshan targeted isrg as a great short into earnings in his journal

  5. PJT



    Chasing Value: Intuitive Surgical drops on analyst disappointment
    Posted Apr 18th 2008 11:52AM by Sheldon Liber
    Filed under: Earnings reports, Analyst reports, Forecasts, Chasing Value, Intuitive Surgical Inc (ISRG), Best Stocks for 2008

    While analysts have proven over and over again that they are human (can't be more polite than that) the impact that they have on short-term stock values is clear. Intuitive Surgical Inc. (NASDAQ: ISRG), which closed yesterday at $348.50, dropped to $310.54 at the opening bell and is now trading at $292.00 as I type away. I will report the closing price in an update, but for now the stock has been hit hard -- down over 16%.

    ISRG the maker of the da Vinci system, which uses robotic equipment and computers to do minimally invasive surgical procedures disappointed analysts and the stock was punished. Interestingly ISRG reported strong growth and even a positive outlook, however, that outlook was not as glowing as analysts expected and the result is not pretty. Does this mean that the company is not doing very well -- no. Does this mean that the stock price will not be higher next year than it is today -- the answer is no again.

    What it does mean is that like other stocks with nosebleed valuations, such as Intuitive's with a trailing P/E of 80, they remain hypersensitive to the slightest deviation from expectations, reasonable or not. This happens even when Intuitive Surgical Q1 profit almost doubled.

    Intuitive Surgical reported Q1 EPS of $1.12, compared with analysts' consensus estimate of 98 cents. The company's Q1 revenue was $188.2M, versus the consensus of $178.21M. The company predicted that its revenue would grow 42% in 2008, implying revenue guidance of $853.2M, versus the consensus of $857.3M. Two research firms had different outlooks on Intuitive Surgery's shares after the company announced its results. Deutsche Bank believes the results should reduce worries about the credit crunch negatively affecting the company. The firm thinks the underlying demand for robotic surgery is favorable, while the company's business is still strong, and they maintained their Buy rating. ThinkPanure downgraded the stock to Accumulate from Buy. While the firm believes that Intuitive had a strong Q1 and they forecast that the results will help the company grow into its multiple, they do not anticipate that the shares will appreciate this year.

    Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of ISRG.

    Tags: Chasing Value, ChasingValue, Earnings and Forcasts, EarningsAndForcasts, Intuitive Surgical, IntuitiveSurgical, ISRG,