According to a McKinsey Global Institute report, by 2030, one-third of American jobs could become automated because a technology-driven world will continue to substitute human work activities with robots and AI (artificial intelligence)-powered technologies. The COVID-19 pandemic has resulted in unexpected innovations in automation, with the rapid deployment of robotic technology in the healthcare system. Because the healthcare sector plans to be ready if/when the next pandemic hits, its demand for robot-assisted healthcare technologies should accelerate.
The global healthcare robotics market is expected to grow at a 21.5% CAGR over the next five years to hit approximately $11 billion by 2026. Many hospitals worldwide are currently using robots to support staff and patients. The growing need for automation and rapid technological advancements to cure patients should further drive the industry’s growth.
Against this backdrop, we think one should consider buying the dip in Intuitive Surgical, Inc. (ISRG), Boston Scientific Corporation (BSX), and Integra LifeSciences Holdings Corporation (IART). These robotics companies are well positioned to see sustained demand for their products.
Intuitive Surgical, Inc. (ISRG)
Founded in 1995, ISRG is a global technology leader in robotic assisted, minimally invasive surgery. The company develops, manufactures and markets the da Vinci surgical system that includes surgeon’s consoles, patient-side carts, 3-D HD vision systems, skills simulators, etc., along with EndoWrist instruments, such as forceps, scissors, electrocautery tools, scalpels, etc.
In the first quarter, ended March 31, 2021, ISRG’s revenue increased 18% year-over-year to $1.29 billion, while its non-GAAP income from operations increased 37.2% from its year-ago value to $527 million. The company reported $427 million in non-GAAP net income, representing a 32.2% increase year-over-year. Its EPS increased 30.4% year-over-year to $3.52.
Analysts expect ISRG’s revenue for the current quarter, ending June 30, 2021, to be $1.26 billion, representing 48.3% year-over-year growth. The company’s EPS is likely to increase 175.7% year-over-year to $3.06 for the same period.
ISRG’s stock has gained 41.7% over the past year and closed yesterday’s trading session at $821.54. It is currently trading 8.1% below its $893.79, 52-week high.
ISRG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. ISRG has a B grade for Sentiment, Quality and Growth. Among the 181 stocks in the Medical – Devices & Equipment industry , it is ranked #53.
Click here to see the additional POWR Ratings for ISRG (Stability, Value and Momentum).
Boston Scientific Corporation (BSX)
BSX deals in three kinds of businesses: Rhythm and Neuro; Cardiovascular; and MedSurg. It is the leader in global interventional cardiology and offers drug-eluting coronary stent products such as SYNERGY Everolimus-Eluting Platinum Chromium Coronary Stent System and Promus ELITE.
In March, BSX entered an agreement with an affiliate of Baring Private Equity Asia to acquire the global surgical business of Lumenis LTD., a privately held company that operates in energy-based medical solutions. This acquisition should…
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