How Netflix, Intuitive Surgical Fared After Tuesday's Stock Market Rebound

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As quickly as the stock market plunged on Monday, it managed to put together a pretty convincing rebound on Tuesday. Nothing fundamental really changed in that 24-hour period, but market participants nevertheless concluded that greater optimism was warranted. Gains for the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) were all right around 1.5%.

Index

Percentage Change

Point Change

Dow

+1.62%

+550

S&P 500

+1.52%

+65

Nasdaq Composite

+1.57%

+224

Data source: Yahoo! Finance.

A lot of investors were looking forward to what happened after the closing bell. Two companies, Netflix (NASDAQ:NFLX) and Intuitive Surgical (NASDAQ:ISRG), were among the many releasing their latest earnings results. As it turns out, only one of them managed to gain ground in the after-hours session . Below, we’ll look more closely at what each of these two companies said about their results.

A streaming slowdown?

Shares of Netflix were down slightly in the regular session. They then moved further downward, between 1% and 2% as of 4:30 p.m. EDT, following its release of second-quarter numbers.

Netflix continued to see solid performance, although growth rates slowed from what investors have seen recently. Revenue was up 19% to $7.34 billion during the quarter. The total number of Netflix subscribers globally rose by 1.54 million to 209.18 million, marking a rise of just 8%. Net income saw much healthier year-over-year gains of 88%, producing earnings of $2.97 per share.

Image source: Getty Images.

Yet some were unhappy about the trends Netflix projected. The company believes it will bring in just 3.5 million net new subscribers during the third quarter, and sales growth will slow further to just 16%. With memberships in the U.S. and Canada having declined from where they were three months ago, the sluggish gains the company is projecting aren’t boosting confidence levels among shareholders.

Netflix stock saw huge gains during the pandemic, but it’s flattened out over the past year or so. That’s not an unusual pattern in the long-term evolution of the company, but Netflix needs to convince investors where its next big growth opportunity will come from.

A surgical surge for Intuitive

Intuitive Surgical was the after-hours winner, with its shares climbing almost 3%. The stock price is challenging the $1,000 per-share mark as investors celebrate another strong performance from the robotic surgical platform provider.

The numbers at Intuitive Surgical were impressive. Revenue grew 72% year over year, producing a two-year average annual growth rate of 15%. Adjusted net income more than tripled to $477 million, producing earnings of $3.92 per share on an adjusted basis.

Intuitive’s user base for its da Vinci surgical systems kept growing. The company shipped 328 systems during the quarter, up 84% from the second quarter of 2020, and that brought its installed base to 6,335 systems. Moreover, procedures grew 68% year over year and an average of 16.5% per year since 2019, helping to bolster sales of consumables.

The pandemic didn’t really slow the gains in Intuitive Surgical’s stock price, and optimism about the company remains at high levels. With the medical profession becoming comfortable with robotics, Intuitive has a long growth runway ahead of it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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