Procept BioRobotics climbed to record highs Tuesday after the medical stock broke out of a base on a positive earnings report. Procept is today's selection for IBD 50 Stocks To Watch.
The relative strength line is at a new high after shares broke out in the largest volume since their previous breakout, on Aug. 21. In both cases, the stock broke out of a double-bottom base.
Shares broke out Monday after third-quarter results beat expectations. The stock was in a buy zone to 89.78 in early trading Tuesday. But a fast climb left it extended from a buy point of 85.50. Unless the stock dips back into buy range, investors should wait for Procept to test a support level or for a follow-on entry.
Sales grew 66% from the prior year to $58.4 million, but the company continued to report losses. However, the Q3 loss of 40 cents per share was an improvement from the previous quarter and year-ago period. The robotics surgical equipment maker saw margins improve to 63.2% from 53.8% in the third quarter of 2023. IBD MarketSurge's earnings line tool shows a bullish upward trend.
For the full year, Procept increased its sales guidance to $222.5 million-$223 million from its earlier outlook of $217 million.
Medical Stock Holds Mixed Ratings
The medical equipment stock's ratings are mixed, but its Relative Strength Rating of 98 out of 99 shows that the stock has outperformed the vast majority of stocks in the Investor's Business Daily database over 52 weeks.
Because the company is not profitable, the EPS Rating is 34 and weighs on the Composite Rating, which is just 78.
Mutual funds own 70% of shares outstanding. More funds have been net buyers of the medical stock over the past seven quarters and in recent weeks: The stock's Accumulation/Distribution Rating stands at B.
Procept went public on the Nasdaq in September 2021 at an initial offering price of $25 per share. According to reports, the company reached a market cap of $1.03 billion after the IPO and has risen to a market cap of nearly $5 billion since, according to data on IBD MarketSurge.
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