Intuitive Surgical, Inc. Just Recorded A 9.6% EPS Beat: Here's What Analysts Are Forecasting Next

Last week, you might have seen that Intuitive Surgical, Inc. (NASDAQ:ISRG) released its annual result to the market. The early response was not positive, with shares down 4.4% to US$744 in the past week. Intuitive Surgical reported US$4.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$8.82 beat expectations, being 9.6% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Intuitive Surgical

Following the latest results, Intuitive Surgical's 18 analysts are now forecasting revenues of US$4.95b in 2021. This would be a decent 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to increase 7.9% to US$9.78. Before this earnings report, the analysts had been forecasting revenues of US$5.00b and earnings per share (EPS) of US$11.04 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$773, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Intuitive Surgical analyst has a price target of US$910 per share, while the most pessimistic values it at US$410. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Intuitive Surgical's past performance and to peers in the same industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 14%, in line with its 14% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.8% next year. So it's pretty clear that Intuitive Surgical is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$773, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Intuitive Surgical analysts - going out to 2025, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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