Can Intuitive Surgical Run Higher on Rising Earnings Estimates?

Investors might want to bet on Intuitive Surgical, Inc. ISRG, as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Intuitive Surgical, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

Current-Quarter Estimate Revisions

The company is expected to earn $1.65 per share for the current quarter, which represents a year-over-year change of +13.01%.

The Zacks Consensus Estimate for Intuitive Surgical has increased 6.14% over the last 30 days, as 10 estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $6.67 per share, representing a year-over-year change of +16.81%.

The revisions trend for the current year also appears quite promising for Intuitive Surgical, with 11 estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 8.9%.

Favorable Zacks Rank

The promising estimate revisions have helped Intuitive Surgical earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Intuitive Surgical shares have added 6.5% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.

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