Shares of Intuitive Surgical (NASDAQ:ISRG) have risen by close to 30% this year. The healthcare stock has been rallying after a tough year in 2022 where its share price dropped by 26%. Last week, the company gave investors even more of a reason to be bullish after release encouraging second-quarter earnings.
For the period ending June 30, the company reported a 22% increase in da Vinci procedures. And it placed 331 surgical systems, up from 279 a year ago, with its install base now at 8,042. Overall Q2 revenue of $1.8 billion rose 15% year over year while net income of $421 million was up by 37%.
It was a strong showing for Intuitive and analysts have been quick to boost their price targets for the stock, with many now projecting its value to hit at least $360 or higher within the next 12 months, which would imply a modest upside of over 5%.
Intuitive is a promising healthcare stock to own for the long haul but the problem has often been its valuation. Even based on estimated future earnings, the stock trades at more than 60 times profits. Investors are effectively pricing in a lot of future growth into the stock’s current valuation. That can make it a bit of a risky buy but with strong continued demand for its da Vinci devices, the business looks to be in good shape moving forward.
As long as you’re willing to buy and hold for years, Intuitive Surgical can be a good investment to hang on to.