Intuitive Surgical, a long term healthcare play, is acknowledged as a pioneer in robotic surgery technology. A huge and growing installed base means plenty of earnings visibility from its recurring customers.

SINGAPORE (Jan 23): Nasdaq-listed Intuitive Surgical (ISRG) develops, manufactures, and markets robotic-assisted systems that help empower doctors and hospitals to make surgeries less invasive. The flagship innovation of the company is the da Vinci Surgical System launched in 1999, with multiple improved variations of this system launched ever since. Apart from da Vinci, the Ion Endoluminal System, which obtained US FDA approval earlier last year is another key innovation of the company that enables minimally invasive biopsy in the peripheral lung. Both these systems generate recurring revenue for ISRG through the sales and from operating leases. Currently, 72% of ISRG’s revenue is recurring.

Though surgery and acute care interventions have improved significantly over the past few decades, there remains a significant need for better outcomes and decreased variability of these outcomes, which is why ISRG’s systems are being more widely used globally. The number of operating leases of ISRG’s systems, and sales of installed bases with ISRG’s systems is growing at 28% and 13% on average a year respectively. While ISRG’s share price is somewhat fully valued at current prices, the company has growth potential.

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