There are some robotic surgery stocks for investors to buy in March this year. The growth of robotic-assisted surgery has been driven by its potential benefits, such as smaller incisions, reduced pain and scarring, quicker recovery times, and improved clinical outcomes.
I think that investing in robotic surgery stocks is an underrated thematic choice for investors. The reason being is that there is currently a very low industry penetration of using robots in the surgical market, which means there is potentially money on the table for early investors to take advantage of.
Robotic surgical systems market is projected to grow from $3.3 billion in 2023 to $7.2 billion in 2033, with a CAGR of 15.7%. However, barriers include high costs and limited surgeon training, particularly in developing markets.
Still, I firmly believe that robotic surgery stocks is pioneering where the surgical industry is ultimately heading, especially as the average cost of these systems falls and their floorspaces become more efficient.
So here are seven robot surgery stocks for investors to buy in March this year.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) is known for its da Vinci surgical systems, used globally for a variety of procedures.
In Q4 2023, ISRG showed strong performance with a 21% increase in da Vinci procedures and a 14% growth in the installed base of systems to 8,606. The full year saw a 9% increase in average system utilization. Revenue for Q4 was $1.93 billion, marking a 17% increase from the previous year, and lLeasing accounted for 48% of Q4 placements.
For 2024, ISRG anticipates a 13% to 16% increase in procedures compared to 2023, fueled by a 25% rise in U.S. general surgery procedures.
The market seems to be bullish on ISRG’s general trajectory as it has a forward P/E ratio of 61 times earnings and analysts rate the company as a “Buy”.
Although it may trade at a premium compared with its peer companies, ISRG is the leading brand in robotic surgeries worldwide, and I feel that is expected to continue.
Stryker (SYK)
Stryker (NYSE:SYK) offers the Mako robotic arm, enhancing joint replacement surgery with precision.
The Mako system utilizes a robotic arm to assist surgeons during knee and hip replacement procedures. It provides high precision capabilities by relying on a patient’s specific CT scan data to create a 3D model and plan the surgery.
This system seems to be popular, as for FY23, Stryker forecasted a robust 10.5% organic revenue growth, with further expectations of maintaining a 10% growth rate into FY24.
For Q4 2023, Stryker reported better-than-expected financial results, with an adjusted earnings per share (EPS) of $3.46, surpassing the anticipated $3.27, and a revenue of $5.82 billion, exceeding estimates of $5.60 billion.
The company estimates organic net sales growth between 7.5% and 9.0% for 2024, with an adjusted EPS range of $11.70 to $12, and it’s perhaps one of the best alternative to ISRG for investors interested in these robotics stocks to buy.
Becton, Dickinson and Company (BDX)
Becton, Dickinson and Company (NYSE:BDX) specializes in medical devices and instrument systems.
One of BDX’s key robotic surgery products is the Auriga Robotic Endovascular System. The Auriga system integrates robotics, advanced imaging, and instrumentation to provide precise vascular intervention.
I think that now is a good time for investors to pick up shares of BDX stock. The reason being is that the company raised its full-year adjusted EPS guidance and the midpoint of organic revenue growth, now expecting fiscal year 2024 revenues to range between approximately $20.2 billion to $20.4 billion.
This is an increase from the previous forecast of $20.1 billion to $20.3 billion. This update includes an expectation for fiscal year 2024 adjusted diluted EPS to be $12.82 to $13.06, adjusted from $12.70 to $13.00 previously.
Investing in BDX can be accretive, thanks to the robotics market gradually shifting from a consolidated one to one that’s more fractured and decentralized.
Zimmer Biomet Holdings (ZBH)
Zimmer Biomet Holdings (NYSE:ZBH) is a leader in medical technology with its ROSA robotics platform. This platform is designed specifically for total knee replacement procedures.
ZBH is another one of those robotics stocks that investors should consider buying, and there could be an attractive entry point to scoop up shares.
The company has initiated a restructuring program aimed at cutting costs, expecting run-rate savings of about $200 million by 2025. ZBH also anticipates full-year 2024 profit in the range of $8-$8.15 per share, surpassing analysts’ expectations of $7.95. Moreover, ZBH projects its full-year revenue to grow between 5% to 6% on a constant currency basis.
I think that ZBH is one of the cheaper robotics stocks for investors to buy. Its forward P/E is just 15 times earnings, and analysts gave it a “Hold” rating. However, I think that some caution is being given amid ZBH’s restructuring, and this is giving it a discount to its intrinsic value, which could be higher than its share price reflects.
Smith & Nephew (SNN)
Smith & Nephew (NYSE:SNN) focuses on orthopedic reconstruction and sports medicine.
In the orthopedic robotics arena, Smith & Nephew has partnered with Brainlab to co-market the ROBOTICS KNEE platform for total knee replacement procedures. Key features include robotic control during the bone cutting process, integrated navigation software, and patient-specific 3D planning based on medical imaging.
Looking ahead, SNN expects an underlying revenue growth in the range of 5% to 6% (4.6% to 5.6% reported) and targeting a trading profit margin of at least 18%.
As a smaller company with a market cap of just 12 billion, SNN could be accretive for investors who buy shares while the company is still in its infancy. The newness of the business has also led some analysts to set bullish projections for the firm.
One analyst expects SNN’s EPS to increase 71.22% this year, rising to 1.03. There is also a slight upside for its stock price at the time of writing.
Globus Medical (GMED)
Globus Medical (NYSE:GMED) is known for its innovation in musculoskeletal solutions. Meanwhile, in the robotic surgery market, GMED has the ExcelsiusGPS robotic navigation platform for spine procedures. Key applications include robotic trajectory guidance for pedicle screw placement during spine surgeries like fusions, decompressions, etc.
GMED reported significant financial achievements in 2023, including record worldwide net sales of $616.5 million in Q4 and $1.568 billion for the full year. This growth was largely driven by its merger with NuVasive and increased product volumes. Meanwhile, non-GAAP net income rose by 38.9%, and the company reaffirmed its full-year 2024 revenue guidance range of $2.450 billion to $2.475 billion, with non-GAAP EPS between $2.68 to $2.7.
The company also expects to achieve $170 million in synergies from the NuVasive merger over the next three years, and is one of the key reasons that I feel investors should consider buying GMED stock over the long-run.
Medtronic (MDT)
Medtronic (NYSE:MDT) is a leader in medical technology, offering the Hugo robotic-assisted surgery system. Medtronic offers the Hugo robotic-assisted surgery system through its acquisition of Mazor Robotics in 2018.
Key features of Hugo include its modular design for efficient setup, its slimmer profile compared to other systems, and its ability to be utilized in hybrid operating rooms. While later to market than pioneering systems like ISGR’s, Hugo aims to bring robotic precision to commonly performed procedures like spine surgeries first.
Medtronic has raised its financial outlook for the upcoming year following better-than-expected sales and earnings in the first quarter of fiscal 2024. The company now expects its full-year earnings to be between $5.08 and $5.16 per share, an increase from the previously projected range of $5 to $5.10 per share.
Therefore, now could be a good time for investors to scoop up shares of MDT, with each of its four segments delivering 6% organic revenue growth so far in 2024.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
