Intuitive Surgical's stock has enriched its many investors.
Its future looks promising, too.
The shares trade at lower-than-average levels, presenting a compelling opportunity for long-term investors.
If you don't know much about Intuitive Surgical (NASDAQ: ISRG), you might want to remedy that. It's a very impressive growth stock. Its past performance is likely to wow you, and its future looks very promising.
Over the past decade, Intuitive Surgical stock has grown in value at an average annual rate of 23%. Over the past three years, that growth rate ramped up to nearly 30%! If you had invested $10,000 in Intuitive a decade ago, your stake would be worth roughly $80,610 today. The S&P 500 index, in contrast, averaged 13.6% in that period, turning $10,000 into $33,720 -- a still-quite-solid performance.
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Image source: Gertty Images.
Intuitive Surgical is a leader in robotic surgery equipment. It has more than 9,900 of its million-dollar-plus da Vinci robotic surgery systems installed in 72 countries. Together, the systems have been used to perform more than 16 million procedures.
Its business model is delightful, too, as it derives 84% of its revenue not from the costly systems themselves but from rather dependable recurring sales of servicing, supplies, and accessories for the machines. Once a hospital has committed to a da Vinci machine, it can't go elsewhere for servicing and supplies.
And as our world's population ages, there's likely to be more demand for the kinds of procedures that Intuitive Surgical's machines facilitate, such as colorectal surgery, cardiac surgery, hernia surgery, and more. Intuitive's Ion systems also facilitate lung procedures.
According to some metrics, Intuitive's stock is not a bargain right now; for example, its forward-looking price-to-earnings (P/E) ratio was recently 51, which is on the steep side. But that's still well below the stock's five-year average of 56. That's because the stock has pulled back recently, presenting a tempting buying opportunity for interested long-term investors.
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Selena Maranjian has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool has a disclosure policy.