Core Insights - Analysts project Intuitive Surgical, Inc. (ISRG) will report quarterly earnings of $1.65 per share, a 13% increase year over year, with revenues expected to reach $2.02 billion, reflecting a 15.6% growth from the same quarter last year [1] Revenue Estimates - Consensus estimates for 'Revenue- Product (Instruments and accessories and Systems)' are projected at $1.66 billion, indicating a 14.5% increase from the prior-year quarter [2] - 'Revenue- Services' is expected to be $332.33 million, showing a year-over-year change of 13.5% [2] - 'Revenue- Systems' is estimated at $418.90 million, representing a 10.4% increase from the previous year [2] Additional Revenue Metrics - 'Revenue- Instruments and accessories' is projected to reach $1.24 billion, suggesting a 16% year-over-year change [3] - 'Total System Units Placed - Total Company' is forecasted to be 318, up from 312 in the same quarter last year [3] - The 'Da Vinci Surgical System Installed Base' is estimated at 9,500, compared to 8,285 a year ago [3] - 'Total System Units Placed - United States' is expected to be 166, an increase from 159 in the previous year [3] Profit and Cost Estimates - 'Gross profit- Service' is projected at $225.36 million, up from $205.90 million in the same quarter last year [3] - 'Gross profit- Product' is expected to reach $1.10 billion, compared to $961.30 million a year ago [4] - 'Cost of revenue- Service' is estimated at $98.89 million, up from $87 million in the same quarter last year [4] - 'Cost of revenue- Product' is projected at $538.57 million, compared to $489.50 million a year ago [4] Stock Performance - Over the past month, Intuitive Surgical shares have recorded a return of -1%, while the Zacks S&P 500 composite has changed by +4.9% [4]

Core Viewpoint - Intuitive Surgical (ISRG) is experiencing strong demand for its robotic surgery procedures, particularly the newly launched da Vinci 5, which is expected to drive market penetration and long-term growth despite facing some supply challenges and competition in the industry [1][3][4]. Group 1: Stock Performance and Market Trends - ISRG shares have decreased by 0.7% in the past month, while the Zacks Medical-Instruments industry and broader Zacks Medical sector have declined by 3.4% and 4.6%, respectively [1]. - Year-to-date, ISRG stock has risen by 42.5%, primarily due to strong demand for robotic surgery procedures [1]. - The company expects procedure volume to grow by 14-17% in 2024, reflecting a rebound in demand for medical procedures post-COVID-19 [3]. Group 2: Product Developments and Growth Drivers - The da Vinci 5's advanced imaging capabilities are anticipated to enhance market penetration and open new targeted segments [1]. - The installed base of the da Vinci system grew approximately 14% year-over-year during the second quarter of 2024 [7]. - The Ion endoluminal system has seen a significant year-over-year growth of 82% in procedures completed, with the installed base growing by 56% to 678 units [8]. Group 3: Financial Expectations - The Zacks Consensus Estimate for 2024 revenues indicates a year-over-year improvement of 13.7% [3]. - ISRG expects gross margin in 2024 to be between 68.5% and 69%, up from 68% in 2023, driven by strong uptake of da Vinci 5 and lower material costs [5]. - The earnings estimate for 2024 is pegged at $6.67 per share, reflecting a 16.8% year-over-year improvement [6]. Group 4: Competitive Landscape and Challenges - ISRG faces significant competition from established companies like Johnson & Johnson and Medtronic, which may impact its market position [9]. - Supply challenges for catheters in the Ion endoluminal system and moderating growth in bariatric procedures are concerns for the company [2][4]. - Geopolitical tensions and supply chain challenges may adversely affect ISRG's operations and product sales [10][11].

Group 1 - Intuitive Surgical, Inc. (ISRG) has an average brokerage recommendation (ABR) of 1.69, indicating a consensus between Strong Buy and Buy based on 26 brokerage firms' recommendations [1][2] - Of the 26 recommendations, 16 are Strong Buy (61.5%) and 2 are Buy (7.7%), reflecting a strong positive bias from analysts [1] - Despite the positive ABR, studies suggest limited success of brokerage recommendations in guiding investors towards stocks with the best price increase potential due to analysts' vested interests [2][5] Group 2 - The Zacks Rank, which classifies stocks based on earnings estimate revisions, is a more reliable indicator of near-term price performance compared to ABR [3][5] - The Zacks Consensus Estimate for Intuitive Surgical remains unchanged at $6.67, suggesting steady views on the company's earnings prospects [7] - Intuitive Surgical currently holds a Zacks Rank 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [7]

Core Viewpoint - Intuitive Surgical Inc is significantly overvalued based on the Discounted Earnings model, with an intrinsic value of $117.38 compared to its current trading price of $479.5, resulting in a margin of safety of -308.5% [1] DCF Model Overview - The GuruFocus DCF calculator employs a two-stage model consisting of a Growth Stage and a Terminal Stage, reflecting the company's growth dynamics [1] - The Growth Stage assumes a growth rate of 11.60% over 10 years, while the Terminal Stage applies a lower growth rate of 4% for another 10 years [3] Assumptions and Calculations - The DCF model uses EPS without NRI, which is currently $6.04, and a discount rate of 10% derived from the risk-free rate plus a risk premium [2] - The intrinsic value calculated using the Discounted Earnings model is $117.38, while the DCF based on Free Cash Flow indicates an intrinsic value of $14.53, highlighting significant overvaluation [4] Growth and Discount Rates - The growth rate for the Terminal Stage is capped at 4% to ensure it remains lower than the discount rate, which is set at 10% [3] - The model prioritizes historical EPS growth rates from the past 10, 5, or 3 years, ensuring a balanced estimate [3] Conclusion - The analysis indicates that Intuitive Surgical Inc is overvalued based on both DCF methodologies, suggesting a need for caution among investors [4]

Company Performance - Intuitive Surgical, Inc. (ISRG) closed at $484.76, reflecting a -1.33% change from the previous day's close, underperforming the S&P 500's daily loss of 0.93% [1] - Over the past month, ISRG shares have decreased by 0.28%, while the Medical sector has declined by 3.08% and the S&P 500 has increased by 2.17% [1] - The upcoming earnings report is scheduled for October 17, 2024, with expected EPS of $1.65, representing a 13.01% increase year-over-year, and projected revenue of $2.02 billion, indicating a 15.57% rise from the same quarter last year [1] Annual Forecast - Zacks Consensus Estimates predict earnings of $6.67 per share and revenue of $8.1 billion for the year, showing increases of +16.81% and +13.69% respectively compared to the previous year [2] - Changes in analyst estimates are crucial as they reflect the evolving business trends, with upward revisions indicating positive sentiment towards the company's operations [2] Valuation Metrics - Intuitive Surgical, Inc. has a Forward P/E ratio of 73.7, significantly higher than the industry average of 27.63 [3] - The company holds a PEG ratio of 4.24, compared to the average PEG ratio of 2.27 for Medical - Instruments stocks [3] Industry Ranking - The Medical - Instruments industry is part of the Medical sector and currently holds a Zacks Industry Rank of 61, placing it in the top 25% of over 250 industries [4] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]

Company Performance - Intuitive Surgical, Inc. (ISRG) closed at $484.39, showing no change from the previous session, outperforming the S&P 500 which lost 0.19% [1] - The stock has increased by 0.43% over the past month, while the Medical sector declined by 1.58% and the S&P 500 gained 1.95% [1] - Upcoming earnings report is scheduled for October 17, 2024, with projected EPS of $1.65, a 13.01% increase year-over-year, and anticipated revenue of $2.02 billion, reflecting a 15.57% increase [1] Full Year Estimates - Zacks Consensus Estimates project full-year earnings of $6.67 per share and revenue of $8.1 billion, representing increases of 16.81% and 13.69% respectively from the prior year [2] Analyst Estimates and Valuation - Recent changes to analyst estimates indicate short-term business trends, with positive revisions suggesting optimism about the company's outlook [2] - The Zacks Rank system currently rates Intuitive Surgical, Inc. at 3 (Hold), with a Forward P/E ratio of 72.67, significantly higher than the industry average of 27.25 [3] - The company has a PEG ratio of 4.18, compared to the Medical - Instruments industry's average PEG ratio of 2.23 [3] Industry Overview - The Medical - Instruments industry is part of the Medical sector and holds a Zacks Industry Rank of 72, placing it in the top 29% of over 250 industries [4] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]

Core Viewpoint - Intuitive Surgical, Inc. (ISRG) is positioned for growth due to its strength in robotics and advancements in Artificial Intelligence (AI), despite facing procedure adoption risks and competition [1] Upsides - Strength in Robotics: The da Vinci surgical system is driving a shift from conventional surgery to minimally invasive procedures, with a notable increase in system placements and demand for the new da Vinci 5 system [2][3] - Strong Q2 Results: The company reported a 14% year-over-year increase in the installed base of da Vinci systems and a 2% increase in utilization rate, with expectations for procedure volume growth of 14-17% in 2024 [3][5] - Progress on the AI Front: The integration of AI in medical technologies is enhancing Intuitive Surgical's product offerings and operational efficiency, indicating a positive trend in the MedTech space [4] Downsides - Macro Challenges Continue: The company may face slower procedure growth due to soft demand for bariatric procedures and challenges in Asia, which could negatively impact top-line growth by nearly three percentage points in 2024 [6] - Supply Chain Issues: Ongoing geopolitical tensions may lead to disruptions in system placements and sales of the Ion modulation system [6] Estimate Trend - The Zacks Consensus Estimate for 2024 earnings remains stable at $6.67 per share, with revenue expectations of $8.10 billion, reflecting a 13.7% improvement from the previous year [7]

Group 1 - The article emphasizes a balanced investment strategy, advocating for a barbell portfolio with 90% in secure assets and 10% in high-alpha stocks to manage risk effectively [1] - The analysis incorporates principles from 'Superforecasting' and 'Antifragile', focusing on probabilistic forecasting and strategies that aim to minimize risk while maximizing potential gains [1] - The author integrates clinical expertise with business strategy in biotech and healthcare investment analysis, utilizing detailed risk-return charts and DCF analyses [1] Group 2 - The article does not provide exhaustive analysis or personalized investment advice, indicating that predictions are based on a probabilistic approach rather than absolute certainty [3] - It highlights the importance of independent verification of information and conducting thorough research before making investment decisions [3]

Core Viewpoint - Intuitive Surgical Inc. has shown strong financial performance and growth potential, particularly with the success of its next-generation Da Vinci 5 robotics system, but the stock appears overvalued given its current price levels [1][21][22]. Financial Performance - The company has consistently outperformed earnings expectations, with recent beats ranging from 3.02% to 40.72%, including a 14.69% beat in the latest quarter [2][21]. - In Q2 2024, Intuitive Surgical reported a 17% year-over-year increase in procedures and a 14% growth in the installed base of Da Vinci systems, contributing to a 14% increase in sales to $2.01 billion [4][5][21]. - The gross margin for the company stands at an impressive 70%, indicating strong profitability despite concerns about potential slowdowns [5][21]. Growth Drivers - The next-generation Da Vinci 5 system is a significant growth driver, featuring enhanced precision and efficiency, with a higher average selling price that supports revenue growth [7][21]. - The company is expected to see a procedure growth forecast of 15.50% to 17% for the year, indicating robust demand beyond pandemic-related backlogs [5][21]. Profitability Metrics - Intuitive Surgical boasts exceptional profitability metrics, with a gross margin of nearly 67% and an operating margin of 26%, well above industry averages [8][21]. - The company maintains a net margin of almost 28%, reflecting superior cost control and operational efficiency [8][9]. Financial Strength - The company has zero debt and a strong equity-to-asset ratio of 0.88, providing flexibility for future investments and acquisitions [9][21]. - A DuPont analysis reveals a return on equity (ROE) of 14.77%, with an asset turnover of 0.50 times, indicating efficient asset utilization [9][21]. Future Projections - Revenue is projected to grow from $8.09 billion in 2024 to $10.83 billion by 2026, reflecting a cumulative increase of 3.87% and an annualized growth rate of approximately 15.08% [16][21]. - Earnings per share (EPS) is expected to rise from $5.71 in 2024 to $8.94 by 2026, marking a substantial 56.55% increase [16][21]. Valuation Concerns - The stock is currently trading around $494, which is above its GF Value of $439.30, indicating potential overvaluation [18][22]. - The price-earnings ratio stands at 84.88, significantly higher than its peers, suggesting high investor expectations with little margin for error [20][22].

Company Performance - Intuitive Surgical, Inc. (ISRG) closed at $490.01, with a daily increase of +1.64%, underperforming the S&P 500's gain of 1.7% [1] - Over the past month, ISRG shares have depreciated by 1.09%, while the Medical sector gained 1.53% and the S&P 500 gained 1.27% [1] - The upcoming earnings report is scheduled for October 17, 2024, with an expected EPS of $1.65, indicating a growth of 13.01% year-over-year, and projected revenue of $2.02 billion, reflecting a 15.57% increase [1] Full Year Estimates - Zacks Consensus Estimates predict earnings of $6.67 per share and revenue of $8.1 billion for the full year, representing changes of +16.81% and +13.69% from the previous year [2] - Recent changes to analyst estimates indicate short-term business trends, with positive revisions reflecting optimism about the company's profitability [2] Valuation Metrics - Intuitive Surgical, Inc. currently has a Zacks Rank of 3 (Hold), with no change in the consensus EPS estimate over the past month [3] - The company is trading at a Forward P/E ratio of 72.33, significantly higher than the industry average of 27.21 [3] - The PEG ratio for ISRG is 4.16, compared to the Medical - Instruments industry's average PEG ratio of 2.19 [3] Industry Overview - The Medical - Instruments industry is part of the Medical sector and holds a Zacks Industry Rank of 65, placing it in the top 26% of over 250 industries [4] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]