Inuitive Surgical Earnings To Set Stock Status (ISRG)

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After today’s close, we’ll see earnings out of Intuitive Surgical, Inc. (NASDAQ: ISRG). The estimates for the DaVinci robotic surgical device maker from First Call are $0.98 EPS on $178.21 million in revenues.  Next quarter estimates are $1.19 EPS on $202.76 million in revenues. Estimates for fiscal Dec-2008 are $5.12 EPS on $857.30 million in revenues.

As this one has stayed strong and been up huge, this is well above key longer-term  moving average we like to use for trend establishments.  The 50-day moving average is $306.41 and the 200-day moving average is $267.04.  With shares flirting at $349.11, it’s a long way above those to determine key long-term support levels.  Options expire tomorrow, but traders appear to be braced for a move of $19.00 to $21.00 in either direction.

Analysts have an average price target north of $356.00.  Intuitive Surgical’s 52-week trading range is $120.54 to $359.59. 

This has been a major growth stock, and the earnings report here will either allow that status to prevail or it will seek a "market adjustment."  While that is stating the obvious, this earnings and guidance call could be a critical juncture for the stock.  As this stock has risen more than 20-fold over the last 5-years, you can imagine that this one will be closely watched.  Throw that in with charity hospitals and other quasi non-profit hospitals recently being under some tighter spending, and you’ve got a horse race. 

With 2.5 million shares short and with a fairly low open interest in current month stock options, the trading activity is likely to be the value and growth buyers forming their longer-term opinions after such a long stock run.

Jon C. Ogg
April 17, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at and he does not own securities in the companies he covers.