Medical device maker Intuitive Surgical (NSDQ:ISRG) is still a good buy for long-haul investors, according to analysts at William Blair, who defense of the company comes in the midst of some harsh words from fellow researchers.
Intuitive Surgical may not be a short-term golden goose, Blair analysts wrote in a note to investors, but the company’s stock still appears to have an upside for players that can wait about 6 months.
The optimistic outlook, paired with an "outperform" rating, preceded a 4% boost in ISRG shares yesterday and another 2.4% boost today. ISRG shares were trading at $389.99 as of about 1:20 p.m. today, still a far cry from the opening price of $506.50 at the start of 2013.
Intuitive Surgical’s share price lost 25.3% this year alone as the company struggled with a series of studies finding robotic surgery equally safe and effective but more expensive than laparoscopy. Investors, who sent ISRG shares to an all-time high of $585.82 apiece in April 2012, have carved some 36.6% from the stock since then.
Prices tumbled 11.1% in a single day last February, to $509.33 per share, after a report in the Journal of the American Medical Assn. also questioned the value of hysterectomies using robotic surgery. In March, the president of the American College of Obstetricians & Gynecologists, Dr. James Breeden, criticized robotic surgery hysterectomies.
A study published just last month found that robotic surgeries may be under-reported and therefore less safe than they appear, a conclusion Intuitive called "misleading." Studies published last year raised similar concerns regarding robotic surgery prostatectomies and robotic surgeries to treat endometrial cancer.
The device maker has also been publicly battling analysts at Citron Group, which has this year published a series of harsh criticisms of Intuitive’s track record at the FDA. Citron in January 2013 published all of the FDA’s da Vinci adverse event filings, comprising 12 years’ worth of reporting. Earlier this month Citron released another report, accusing Intuitive Surgical of ignoring a surge of new incidents that have cropped up in the FDA’s system.
Intuitive Surgical spokeswoman Angela Wonson denied that there was a true increase in da Vinci incidents, saying that Citron examined the dates the events were reported, rather than when they actually occurred. The company has maintained that its analysis shows a decrease in adverse events when looking at global rates of surgery compared with FDA reports, a conclusion that Citron called a “gross misuse of statistical data.”