ISRG.....compared with Qcom
My overall take, which is based on only general and limited knowledge, and following a couple of message boards, and talking to a few docs.............is the following:
1. This ain't the time to buy.
stockcharts.com 
2. This is a gorilla as it relates to the niche of Urologic surgery. Strong competitive advantage, increasing rapid adoption, stickiness once involved as surgeons don't like to have to radically change approaches; once turned on to robotics, they will drag their feet before adopting the next new technique, unless the evidence drives them overwhelmingly to do so.
3. I like the idea of recurring revenues thru sales of accessories.
4. However, while some tout its utility in the larger potential spaces of cardiac surgery, general surgery and gynecology, in truth, I have personally seen "zero" evidence that robotics improve outcomes in these fields, such that their will be a drive in sales of their device for these indications.
So, at present, the reason to invest in ISRG, when it bottoms, is because only about 20% or so of the Urologic niche has been filled, and there are relative gains to be made in revenues from this niche. So I would roughly project 2-3 years of substantive growth for this niche alone. I do think robotics feature a certain WOW factor, and hospitals in congested markets are desperate to distinguish themselves from the herd.
However, if gyn and other niches don't unfold, the WOW will diminish, and the market, which is projecting future returns, will factor this into the share price, which might then turn this into a slow-growth company/stock.
By analogy, QCOM owned the CDMA 2000 2G niche, both in royalties and in chip sales. 1999 spectacular growth was based on this. However, it took a long time for 3G to unfold; 2.5G, or 1X, did beef up revenues, but that took longer to unfold too. Still the stock reflected these anticipated and unfolding events in 2003, and 2004. Now, we are waiting for the reality of 3G to unfold, as we know it must. What we don't know is the rate of change or the pace of adoption; we also don't know what fraction of WCDMA chip uptake will be enjoyed by Qcom. These unknowns have kept the stock price flat this past year, IMHO. When these become knowns, and coupled with increasing 3G uptake, Qcom stock price will leg up again. I just don't know when that'll be.
So the comparison I am making here is that qcom is a "many-trick" pony. Whereas, Sir Dancelot and others in the glory days would appropriately ponder whether ISRG is a "one-trick" pony.
Lucius should chime in here. Luke, do you have first hand knowledge, or do you have evidence based experience/studies that show ISRG has a patient outcome edge in other fields (ie, bowling pins) besides that of Urology?
Apollo |
