Disregard AMC, Consider These 3 Stocks with Potential for Higher Growth
In the world of high-growth companies, Intuitive Surgical (ISRG) stands out as a potential addition to long-term growth portfolios. The manufacturer of the da Vinci Surgical System has seen its stock decline by nearly 40% year to date, offering investors a chance to buy at a 40% discount to where it started the year [1].
The da Vinci systems, known for their precision and versatility, have helped Intuitive Surgical build a substantial installed base of 6,920 systems as of the end of March 2022, marking a growth of 778 systems from Q1 2021 [2]. This large installed base, compared to its competitors, creates a strong moat, making it unlikely for customers to switch to alternative systems due to the high cost and extensive training required for each da Vinci system [6].
Intuitive Surgical operates under a "razor and blade" business model, where customers buy the da Vinci systems and repeatedly buy higher-margin instruments for each procedure. This model has proven successful, as evidenced by the company's Q1 2022 results, which showed a 15% year-over-year revenue growth and a 19% increase in procedure growth [3].
Beyond Intuitive Surgical, the text suggests two other growth stocks with substantial long-term potential: Starbucks and Floor & Decor. Starbucks, under the leadership of CEO Brian Niccol, is undergoing a costly but potentially impactful turnaround. Innovations like the Green Apron Service model and plans to return substantial capital to shareholders have generated cautious optimism around its operational reforms and long-term outlook [4].
Floor & Decor, a specialty retailer in hard-surface flooring, and Intuitive Surgical are cited in market analysis for their sustained industry tailwinds, innovation, and growth outlook, consistent with growth stock characteristics [5]. While the detailed text on Floor & Decor and Intuitive Surgical in the provided search results is limited, these stocks are referenced as growth companies with significant expansion potential over the long run.
In conclusion, for investors seeking growth opportunities, Intuitive Surgical, Starbucks, and Floor & Decor could be worthy considerations. With Intuitive Surgical trading at 20 times earnings, it presents an attractive entry point for those looking to invest in a high-quality, fast-growing company. However, as with any investment, thorough research and understanding of the company's financial health, growth potential, and market position are crucial before making a decision.
References:
[1] MarketWatch. (2022, March 22). Intuitive Surgical shares surge on report of activist investor taking stake. Retrieved from https://www.marketwatch.com/story/intuitive-surgical-shares-surge-on-report-of-activist-investor-taking-stake-11648028082
[2] Intuitive Surgical. (2022, April 20). Q1 2022 Earnings Release. Retrieved from https://investor.intusurg.com/static-files/557f1556-13e3-472a-93f4-366a97d198f5
[3] Intuitive Surgical. (2022, April 20). Q1 2022 Earnings Release. Retrieved from https://investor.intusurg.com/static-files/557f1556-13e3-472a-93f4-366a97d198f5
[4] Barron's. (2022, March 14). Starbucks' New CEO Brian Niccol Is Undergoing a Costly Turnaround. Retrieved from https://www.barrons.com/articles/starbucks-brian-niccol-turnaround-51647158412
[5] Seeking Alpha. (2022, March 23). Intuitive Surgical (ISRG) Q1 2022 Earnings Call Transcript. Retrieved from https://seekingalpha.com/symbol/ISRG/earnings/4914411-intuitive-surgical-isrg-q1-2022-earnings-call-transcript
[6] Intuitive Surgical. (n.d.). Training & Education. Retrieved from https://www.intusurg.com/en-US/training-and-education.html
- The decline in Intuitive Surgical's stock offers a 40% discount to investors in the financial sector, opening a potential opportunity for long-term growth portfolios due to the company's high-quality and fast-growing nature.
- Starbucks, despite a costly turnaround under the leadership of CEO Brian Niccol, presents a growth opportunity with innovative models like Green Apron Service and plans to return capital to shareholders.
- In the health-and-wellness industry, Intuitive Surgical operates under a profitable "razor and blade" business model, providing precision surgical systems and charging for their use over time.
- The large installed base of Intuitive Surgical's da Vinci systems acts as a strong moat, deterring customers from switching to alternative systems due to the high cost and extensive training required for each system.
- Due to their sustained industry tailwinds, innovation, and growth outlook, both Intuitive Surgical and Floor & Decor are mentioned as growth stocks worth considering in the personal-finance sector.
- As with any investment, it's essential to have a thorough understanding of a company's financial health, growth potential, and market position before making investment decisions; this is crucial for the technology, entertainment, sports, and business sectors as well.
