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.
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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.
直觉外科公司(NASDAQ:ISRG)经历了艰难的一个月,其股价下跌了7.9%。但是,仔细观察其稳健的财务状况可能会让你重新思考。鉴于基本面通常会推动长期市场结果,该公司值得关注。特别是,我们今天将关注直觉外科的投资回报率。
股本回报率或投资回报率是股东需要考虑的重要因素,因为它可以告诉他们资本再投资的有效性。简而言之,它衡量公司相对于股东权益的盈利能力。
查看我们对直觉外科的最新分析
你如何计算股本回报率?
这个 股本回报率公式 是:
股本回报率 = 净利润(来自持续经营)≥ 股东权益
因此,根据上述公式,直觉外科的投资回报率为:
12% = 13亿美元 ≥ 11亿美元(基于截至2022年12月的过去十二个月)。
“回报” 是每年的利润。这意味着,每持有价值1美元的股东权益,公司就会产生0.12美元的利润。
投资回报率与收益增长之间有什么关系?
到目前为止,我们已经了解到,投资回报率衡量的是公司创造利润的效率。然后,我们能够评估公司的收益增长潜力,具体取决于公司对这些利润进行再投资或 “保留” 了多少及其有效性。一般而言,在其他条件相同的情况下,股本回报率和利润留存率高的公司的增长率要高于不具有这些属性的公司。
直觉外科公司的收益增长和
首先,直觉外科的投资回报率似乎不错。即使与12%的行业平均水平相比,该公司的投资回报率看起来还是不错的。因此,这可能为直觉外科在过去五年中实现12%的可观增长奠定了基础。
下一步,我们将直觉外科的净收入增长与该行业进行了比较,但失望地看到该公司的增长低于同期17%的行业平均增长。
NasdaqGS:ISRG 于2023年2月7日过去的收益增长
赋予公司价值的基础在很大程度上与其收益增长息息相关。投资者接下来需要确定的是,预期的收益增长或缺乏收益增长是否已经包含在股价中。通过这样做,他们将知道种群是进入清澈的蓝色海水还是沼泽水域在等着你。如果你想知道直觉外科的估值,可以看看这个衡量其市盈率与行业相比的指标。
直觉外科能否有效地将其利润再投资
直觉外科目前不支付任何股息,这本质上意味着它一直在将所有利润再投资于该业务。这无疑有助于实现我们上面讨论的不错的收益增长数字。
结论
总的来说,我们对直觉外科的表现非常满意。特别是,我们喜欢该公司以很高的回报率对其业务进行大量再投资。因此,其收益的良好增长不足为奇。在研究分析师目前的估计时,我们发现分析师预计该公司将继续保持最近的增长势头。要详细了解分析师对公司的最新预测,请查看分析师对公司的预测的可视化。
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Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用不偏不倚的方法根据历史数据和分析师预测提供评论,我们的文章并非旨在提供财务建议。 它不构成买入或卖出任何股票的建议,也没有考虑您的目标或财务状况。我们的目标是为您提供由基本面数据驱动的长期重点分析。请注意,我们的分析可能未将最新的价格敏感型公司公告或定性材料考虑在内。简而言之,华尔街对上述任何股票都没有头寸。
译文内容由第三方软件翻译。
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