Declining Stock and Solid Fundamentals: Is The Market Wrong About Intuitive Surgical, Inc. (NASDAQ:ISRG)?
Declining Stock and Solid Fundamentals: Is The Market Wrong About Intuitive Surgical, Inc. (NASDAQ:ISRG)?
Intuitive Surgical (NASDAQ:ISRG) has had a rough month with its share price down 7.9%. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to Intuitive Surgical's ROE today.
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
See our latest analysis for Intuitive Surgical
How Do You Calculate Return On Equity?
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Intuitive Surgical is:
12% = US$1.3b ÷ US$11b (Based on the trailing twelve months to December 2022).
The 'return' is the yearly profit. That means that for every $1 worth of shareholders' equity, the company generated $0.12 in profit.
What Is The Relationship Between ROE And Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
Intuitive Surgical's Earnings Growth And 12% ROE
To begin with, Intuitive Surgical seems to have a respectable ROE. Even when compared to the industry average of 12% the company's ROE looks quite decent. Consequently, this likely laid the ground for the decent growth of 12% seen over the past five years by Intuitive Surgical.
As a next step, we compared Intuitive Surgical's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 17% in the same period.
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. If you're wondering about Intuitive Surgical's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.
Is Intuitive Surgical Efficiently Re-investing Its Profits?
Intuitive Surgical doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above.
Conclusion
In total, we are pretty happy with Intuitive Surgical's performance. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. As a result, the decent growth in its earnings is not surprising. On studying current analyst estimates, we found that analysts expect the company to continue its recent growth streak. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
直覺外科公司(NASDAQ:ISRG)經歷了艱難的一個月,其股價下跌了7.9%。但是,仔細觀察其穩健的財務狀況可能會讓你重新思考。鑑於基本面通常會推動長期市場結果,該公司值得關注。特別是,我們今天將關注直覺外科的投資回報率。
股本回報率或投資回報率是股東需要考慮的重要因素,因為它可以告訴他們資本再投資的有效性。簡而言之,它衡量公司相對於股東權益的盈利能力。
查看我們對直覺外科的最新分析
你如何計算股本回報率?
這個 股本回報率公式 是:
股本回報率 = 淨利潤(來自持續經營)≥ 股東權益
因此,根據上述公式,直覺外科的投資回報率為:
12% = 13億美元 ≥ 11億美元(基於截至2022年12月的過去十二個月)。
“回報” 是每年的利潤。這意味着,每持有價值1美元的股東權益,公司就會產生0.12美元的利潤。
投資回報率與收益增長之間有什麼關係?
到目前為止,我們已經瞭解到,投資回報率衡量的是公司創造利潤的效率。然後,我們能夠評估公司的收益增長潛力,具體取決於公司對這些利潤進行再投資或 “保留” 了多少及其有效性。一般而言,在其他條件相同的情況下,股本回報率和利潤留存率高的公司的增長率要高於不具有這些屬性的公司。
直覺外科公司的收益增長和
首先,直覺外科的投資回報率似乎不錯。即使與12%的行業平均水平相比,該公司的投資回報率看起來還是不錯的。因此,這可能為直覺外科在過去五年中實現12%的可觀增長奠定了基礎。
下一步,我們將直覺外科的淨收入增長與該行業進行了比較,但失望地看到該公司的增長低於同期17%的行業平均增長。
NasdaqGS:ISRG 於2023年2月7日過去的收益增長
賦予公司價值的基礎在很大程度上與其收益增長息息相關。投資者接下來需要確定的是,預期的收益增長或缺乏收益增長是否已經包含在股價中。通過這樣做,他們將知道種羣是進入清澈的藍色海水還是沼澤水域在等着你。如果你想知道直覺外科的估值,可以看看這個衡量其市盈率與行業相比的指標。
直覺外科能否有效地將其利潤再投資
直覺外科目前不支付任何股息,這本質上意味着它一直在將所有利潤再投資於該業務。這無疑有助於實現我們上面討論的不錯的收益增長數字。
結論
總的來説,我們對直覺外科的表現非常滿意。特別是,我們喜歡該公司以很高的回報率對其業務進行大量再投資。因此,其收益的良好增長不足為奇。在研究分析師目前的估計時,我們發現分析師預計該公司將繼續保持最近的增長勢頭。要詳細瞭解分析師對公司的最新預測,請查看分析師對公司的預測的可視化。
對這篇文章有反饋嗎?對內容感到擔憂? 取得聯繫 直接和我們聯繫。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St 的這篇文章本質上是一般性的。 我們僅使用不偏不倚的方法根據歷史數據和分析師預測提供評論,我們的文章並非旨在提供財務建議。 它不構成買入或賣出任何股票的建議,也沒有考慮您的目標或財務狀況。我們的目標是為您提供由基本面數據驅動的長期重點分析。請注意,我們的分析可能未將最新的價格敏感型公司公告或定性材料考慮在內。簡而言之,華爾街對上述任何股票都沒有頭寸。
譯文內容由第三人軟體翻譯。
風險及免責聲明
- 分享到weixin
- 分享到qq
- 分享到facebook
- 分享到twitter
- 分享到微博
- 粘贴板
使用瀏覽器的分享功能,分享給你的好友吧