Shares of robotic surgery pioneer Intuitive Surgical (ISRG -0.29%) have been soaring lately. A preliminary look at sales results from the fourth quarter of 2024 suggests its business is on the right track.Intuitive Surgical's recent performance and forward outlook are outstanding, and investors have noticed. Shares of the well-established medical technology business rose 62% during the 12-month period that ended Jan. 22, 2025.Is it still a good time to buy Intuitive Surgical, or has it risen too far already ...

Revenue Growth - Total revenue for Q4 2024 increased by 25% to $2,413.5 million compared to $1,928.3 million in Q4 2023[2] - Instruments and accessories revenue grew by 23% to $1,411.5 million in Q4 2024 from $1,143.7 million in Q4 2023[2] - Recurring revenue accounted for 80% of total revenue in Q4 2024, slightly down from 82% in Q4 2023[2] System Placements - Da Vinci Surgical System placements in the US increased by 36% to 284 units in Q4 2024 from 209 units in Q4 2023[2] - Da Vinci SP Systems placements surged by 58% to 30 units in Q4 2024 from 19 units in Q4 2023[2] - Ion System placements rose by 57% to 69 units in Q4 2024 from 44 units in Q4 2023[2] - The installed base of Da Vinci Surgical Systems increased by 15% to 9,902 units in 2024 from 8,606 units in 2023[2] - Average selling price of systems increased by 12% to $1.59 million in Q4 2024 from $1.42 million in Q4 2023[2] Procedure Growth - Total worldwide procedures increased by 17% to 2,683 thousand in 2024 from 2,286 thousand in 2023[4] - General Surgery procedures outside the US grew by 35% to 254 thousand in 2024 from 188 thousand in 2023[4]

Core Insights - Intuitive Surgical, Inc. is set to announce its fourth-quarter earnings, with Wall Street expecting an EPS of $1.79 and revenues of $2.25 billion [1] - The stock has increased by 63.75% over the past year and 16.06% year-to-date, reaching an all-time high of $615.99 [1][2] - The company is expanding its presence in southern Europe by acquiring da Vinci and Ion distribution businesses, which is seen as crucial for market understanding [2] Financial Performance - Analysts predict a consensus rating of "Buy" for Intuitive Surgical stock, with a price target of $478.48, indicating a potential upside of 5.23% [7] - The average price target from analysts is $636.67, suggesting further growth potential [7] Stock Performance and Technical Analysis - Intuitive Surgical stock is currently trading at $610.45, showing strong bullish momentum and remaining above key moving averages [4] - The MACD indicator at 16.28 and RSI at 76.65 indicate a strong upward trajectory, although the RSI suggests the stock may be approaching overbought levels [5] - Sustained technical strength indicates growing investor confidence, with momentum traders likely to remain engaged as long as the stock holds above key support levels [5][6]

Core Viewpoint - Intuitive Surgical, Inc. (ISRG) is expected to report strong fourth-quarter 2024 earnings, with sales projected at $2.41 billion, reflecting a 25% year-over-year increase, and earnings per share estimated at $1.77 [1][5]. Earnings Estimates - The Zacks Consensus Estimate for ISRG's sales and earnings is $2.41 billion and $1.77 per share, respectively [1]. - Earnings per share estimates for 2024 and 2025 have increased to $6.67 and $7.66, respectively, over the past 30 days [1]. Recent Performance - In the last reported quarter, ISRG achieved an earnings surprise of 11.52%, beating estimates in each of the trailing four quarters with an average surprise of 10.96% [3]. Earnings Prediction - The company has an Earnings ESP of 7.29% and a Zacks Rank of 3 (Hold), indicating a favorable outlook for an earnings beat [4]. Sales Growth Factors - Preliminary sales of $2.41 billion for Q4 2024 indicate a 25% year-over-year growth, driven by strong procedure performance and capital placements [5]. - Instruments and accessories revenues are expected to be approximately $1.41 billion, up 23% year over year, with da Vinci procedures increasing by 18% [6]. Market Trends - General surgery procedures in the U.S. and cancer procedures in ex-U.S. markets have contributed to procedure growth [9]. - China's recovery post-COVID and rising adoption in Japan and India are expected to boost sales [10]. System Placements - ISRG placed 174 da Vinci 5 systems in the U.S., reflecting nearly 60% sequential growth [11]. - Strong system placements in the Asia-Pacific region are also anticipated, although placements in China may face challenges [11]. Margin Expectations - Margins are likely to improve due to cost reductions and lower freight rates, despite an expected increase in depreciation expenses [13]. Stock Performance - ISRG shares have appreciated 31.3% over the past six months, outperforming the industry and S&P 500 [14]. - The current forward 12-month P/E ratio is 93.03X, significantly higher than the industry average of 33.14X, indicating a premium valuation [17]. Investment Outlook - Despite high valuation, ISRG is expected to continue strong performance driven by da Vinci procedure volume growth and improved system placements [20]. - The launch of new systems in Europe and the U.S. is expected to drive further growth, although challenges in bariatric procedures and China may offset some gains [21].

Company Overview - Intuitive Surgical is a healthcare company specializing in robotic-assisted surgical devices, particularly the da Vinci surgical systems, which enable minimally invasive and precise procedures [1] - The company's devices are costly, with prices upwards of $2 million, leading many customers to opt for leasing instead of purchasing [2] Financial Performance - Preliminary Q4 2024 results show revenue of $2.4 billion, a 25% increase from the same period last year [3] - Full-year 2024 revenue is expected to reach $8.4 billion, a 17% increase from the $7.1 billion reported in 2023 [3] - The company has shown strong recovery and growth after pandemic-related disruptions [4] Market and Industry Outlook - The surgical robots market is projected to grow at a compounded annual growth rate of 9.5% until 2030, reaching a global market value of $7.4 billion, up from $4.3 billion in the previous year [4] - The market has significant long-term growth potential as healthcare technologies advance [4] Valuation and Investment Considerations - Intuitive Surgical's stock has rallied, increasing by around 60% over the past 12 months [3] - The stock is expensive, with a price-to-earnings multiple of 95 and a price/earnings-growth multiple over 4, indicating a high valuation [5] - The company's market cap exceeds $210 billion, reflecting a rich valuation [6] - Despite the high valuation, the company's long-term growth potential remains strong, driven by the increasing demand for robotic surgical devices [6][7] - Investors should consider a long-term holding period (10-plus years) to realize potential gains, as short-term gains may be limited due to the stock's high price [7]

Core Insights - Intuitive plans to establish a direct presence in Italy, Spain, Portugal, Malta, and San Marino through the acquisition of da Vinci and Ion distribution businesses in these regions [1][2] - The acquisition is subject to regulatory approvals and is expected to close in 2026 [2][3] - The integration of the acquired businesses will enhance Intuitive's understanding of customer needs and improve patient access to minimally invasive care [3][4] Company Strategy - The acquisition aligns with Intuitive's strategy to invest in expanding its footprint in Europe and to deepen customer relationships [3][4] - Intuitive aims to leverage its direct presence to optimize care delivery and support better patient outcomes [6] Business Operations - Upon completion of the deal, the da Vinci and Ion businesses will be wholly owned by Intuitive and integrated into its European commercial and marketing organization [3][4] - The leadership of the acquired companies has played a significant role in establishing robotic technology in Europe, which will be continued post-acquisition [4][5]

Group 1 - Narweena is an asset manager that focuses on identifying market dislocations due to poor understanding of long-term business prospects [1] - The firm aims to achieve excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with barriers to entry [1] - Narweena's investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and long-term investment horizon [1] Group 2 - The firm favors smaller cap stocks and markets where competitive advantages are not immediately apparent [1] - Narweena believes that an aging population, low population growth, and stagnating productivity will create new investment opportunities distinct from historical trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance by reducing competition [1] Group 3 - Some businesses may face rising costs and diseconomies of scale, while economies are increasingly dominated by asset-light businesses [1] - The declining need for infrastructure investments is leading to a situation where a large pool of capital is pursuing a limited set of investment opportunities, driving up asset prices and compressing risk premia [1] - Richard Durant, the leader of Narweena, has a strong educational background in engineering and finance, along with an MBA, and has passed the CFA exams [1]

Core Viewpoint - Analysts forecast that Intuitive Surgical, Inc. (ISRG) will report quarterly earnings of $1.76 per share, reflecting a year-over-year increase of 10%, with anticipated revenues of $2.41 billion, showing a 25.2% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate for the quarter has been revised upward by 0.6% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts predict 'Revenue- Product (Instruments and accessories and Systems)' will reach $1.82 billion, indicating a year-over-year change of +12.4% [5]. - 'Revenue- Services' is expected to be $343.90 million, reflecting a +13% change year over year [5]. - 'Revenue- Systems' is projected to be $484.93 million, showing a +1% change from the previous year [5]. - 'Revenue- Instruments and accessories' is estimated at $1.34 billion, suggesting a +17.2% year-over-year change [6]. System Units and Installed Base - Total System Units Placed - Total Company is expected to reach 427, up from 415 in the previous year [6]. - The 'Da Vinci Surgical System Installed Base' is forecasted to be 9,931, compared to 8,606 in the same quarter last year [7]. - Total System Units Placed - Outside of the United States is projected at 207, slightly up from 206 in the previous year [7]. - Total System Units Placed - United States is expected to be 208, down from 209 in the same quarter last year [8]. Profit and Cost Estimates - Estimated 'Gross profit- Service' is $229.90 million, compared to $214.80 million in the same quarter last year [8]. - 'Cost of revenue- Service' is expected to reach $106.97 million, up from $89.60 million in the previous year [9]. Stock Performance - Shares of Intuitive Surgical have returned +11.5% over the past month, contrasting with the Zacks S&P 500 composite's -2.1% change [9].

Core Insights - Intuitive Surgical (ISRG) shares reached a record high following the announcement of preliminary fourth-quarter and full-year revenue exceeding expectations, driven by increased demand for surgical robotics equipment [2][10] Financial Performance - The company placed 493 da Vinci surgical systems in Q4, an increase from 415 in the previous year, with procedures using the equipment growing 17% year-over-year, particularly in cancer operations [3][10] - Intuitive Surgical shares rose 0.7% to close above $584, having surged nearly 8% the previous day, and have increased 60% over the past 12 months, significantly outperforming the S&P 500's 25% return during the same period [4][10] Technical Analysis - The stock has been trading within an extended rising wedge pattern since early February last year, with recent price consolidation near the lower trendline and 50-day moving average before a significant upward movement [5][10] - An upside target of $650 has been projected using the measuring principle, which involves adding $70 to the top trendline of the rising wedge [7][10] - Key support levels to monitor during potential pullbacks include $550 and $520, with the $550 level expected to attract buying interest [8][9][10]

Core Viewpoint - Intuitive Surgical (ISRG) reported strong preliminary revenues for Q4 and full-year 2024, leading to a 7.7% increase in share price on January 15, 2025 [1] Q4 Preliminary Results - Worldwide revenues for Q4 2024 reached approximately $2.41 billion, reflecting a 25% year-over-year increase and surpassing Zacks Consensus Estimates of $2.21 billion [1] - Instruments and accessories revenues are expected to be around $1.41 billion, up 23% from the previous year [2] - Preliminary systems revenues are projected to be about $655 million, marking a 36% year-over-year growth [3] - The company placed 493 da Vinci Surgical systems in Q4 2024, an increase from 415 systems in the same period last year [4] Full-Year Preliminary Results - Full-year worldwide revenues are anticipated to be $8.35 billion, indicating a 17% year-over-year increase, exceeding the Zacks Consensus Estimate of $8.15 billion [5] - Instruments and accessories revenues for the full year are expected to be $5.08 billion, representing a 19% growth year-over-year [5] - Systems revenues improved by 17% to $1.97 billion compared to 2023 [5] Procedure Volume and Future Outlook - Procedure volumes have shown consistent growth, primarily driven by general surgery and cancer procedures, with an expected growth of approximately 13-16% in worldwide da Vinci procedures for 2025 [6] Price Performance - Intuitive Surgical's shares have increased by 22.5% over the past three months, outperforming the industry growth of 0.1% and the S&P 500's increase of 0.9% [8]