2). Increase in Average Selling Price of da Vinci Systems: Intuitive Surgical is consistently innovating their da Vinci Surgical System and improving it, which has led to the average selling price increasing from $1.34 million in 2008 to $1.51 million currently. Projections expect this trend to sustain into the future, presenting major opportunity for the company.
3). Growth in Number of da Vinci Systems Sold: In 2011, the company sold 1,548 systems in the US, 372 in Europe, and 212 in the rest of world, presenting incredible opportunity for further international expansion, especially in emerging markets such as China and Latin America.
4). Increased Adoption: Currently, the da Vinci Surgical System is utilized for a wide array of procedures, from operations that fight bladder cancer to endometriosis; however, there are still a huge plethora of illnesses that the da Vinci cannot be used for, and into the future Intuitive is dedicated to making the machine capable of conducting other procedures and thus potentially fueling sales.
5). Acquisitions: In January 2012, Intuitive Surgical acquired its Korean distributor, giving the company greater control over its supply chain; further acquisitions could introduce new and innovative technologies that the company could implement into their surgical system.
Threats:
1). Medical Device Tax: Starting in 2013, a 2.3% excise tax will be placed on the sale of medical devices, which will be applicable to Intuitive Surgical, cutting into profits.
Competitors
Major publicly traded competitors of Intuitive Surgical include Stryker Corporation (NYSE:SYK), Teleflex Incorporated (NYSE:TFX), MAKO Surgical Corp. (NASDAQ:MAKO), and Boston Scientific Corporation (NYSE:BSX).
Stryker Corporation (NYSE:SYK) is valued at $25.44 billion, pays out a dividend yielding 1.57%, and carries a price to earnings ratio of 20.58. Stryker’s core business is concentrated into three main segments, reconstructive, MedSurg, and Neurotechnology & Spine. The company’s products are sold in over 100 countries, and presently the company carries a TTM profit margin of 14.41%.
Teleflex Incorporated (NYSE:TFX) is valued at $3.20 billion, pays out a dividend yielding 1.75%, and carries a price to earnings ratio of 25.13. Teleflex offers single-use medical devices as well as aerospace products. Recently the company’s TTM profit margin has been volatile, with the metric dropping into negative territory before rising to the current 7.63% level.
MAKO Surgical Corp. (NASDAQ:MAKO) is valued at $560.50 million, does not pay out a dividend, and carries a negative price to earnings ratio. The company’s product portfolio includes MAKOplasty, a major product for the company. Fundamentally, MAKO’s business model is seriously flawed, as at no time in the company’s history has the TTM profit margin been positive; currently the metric sits at -28.22%.
Boston Scientific Corporation (NYSE:BSX) is valued at $14.59 billion, does not pay out a dividend, and carries a negative price to earnings ratio. Boston Scientific’s product portfolio includes offerings from the Interventional Cardiology segment to the Electrophysiology segment. Since the IPO of the company, its fundamental business has never been weaker, with currently the stock possessing a TTM profit margin of -63.47%.
