By Rob Otman
Intuitive Surgical (Nasdaq: ISRG) is a $46 billion company today. Investors that bought shares one year ago are sitting on a 58.43% total return. That’s above the S&P 500’s return of 13.79%.
Intuitive Surgical stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: Intuitive Surgical reported a recent EPS growth rate of -9.8%. That’s below the health care equipment and supplies industry average of 100.46%. That’s not a good sign. We like to see companies that have higher earnings growth.
✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the health care equipment and supplies industry is 40.56. And Intuitive Surgical’s ratio comes in at 47.03. Its valuation looks expensive compared to many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for Intuitive Surgical stock is 0%. That’s below the health care equipment and supplies industry average of 58.99%. The company is less leveraged.
✗ Free Cash Flow per Share Growth: Intuitive Surgical has decreased its FCF per share over the last year relative to its competitors. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.
✗ Profit Margins: The profit margin of Intuitive Surgical comes in at -4.35% today. And generally, the higher, the better. We also like to see this ratio above competitors. Intuitive Surgical’s profit margin is below the health care equipment and supplies average of 8.89%. So that’s a negative indicator for investors.
✗ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Intuitive Surgical is 12.57% and that’s below its industry average ROE of 16.5%.
Intuitive Surgical stock passes one of our six key metrics today. That’s why our Investment U Stock Grader gives it a Sell.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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