da Vinci Surgical System Performance - Worldwide da Vinci procedures grew approximately 18% compared with the third quarter of 2023[1] - The Company placed 379 da Vinci surgical systems, including 110 da Vinci 5 systems, in Q3 2024, up from 312 systems in Q3 2023[1] - The da Vinci surgical system installed base grew to 9,539 systems as of September 30, 2024, a 15% increase from 8,285 systems at the end of Q3 2023[1] - In October 2024, the Company obtained regulatory clearance in South Korea for the da Vinci 5 surgical system for use in multiple surgical procedures[1] Revenue and Financial Performance - Q3 2024 revenue increased 17% to $2.04 billion compared to $1.74 billion in Q3 2023[1] - Total revenue for Q3 2024 reached $2,038.1 million, up 16.9% YoY from $1,743.7 million in Q3 2023[13] - Nine-month total revenue for 2024 reached $5,938.6 million, up 14.3% YoY from $5,195.8 million in 2023[16] - Instruments and accessories revenue increased by 18% to $1.26 billion in Q3 2024, driven by 18% growth in da Vinci procedure volume and 73% growth in Ion procedure volume[2] - Instruments and accessories revenue grew 18.0% YoY to $1,264.2 million in Q3 2024[13] - Systems revenue was $445 million in Q3 2024, compared to $379 million in Q3 2023, with 220 systems placed under operating lease arrangements, including 141 under usage-based leases[2] Net Income and Earnings Per Share - Q3 2024 GAAP net income attributable to Intuitive was $565 million, or $1.56 per diluted share, compared to $416 million, or $1.16 per diluted share, in Q3 2023[1] - Q3 2024 non-GAAP net income attributable to Intuitive was $669 million, or $1.84 per diluted share, compared to $524 million, or $1.46 per diluted share, in Q3 2023[1] - Net income attributable to Intuitive Surgical, Inc. increased 35.9% YoY to $565.1 million in Q3 2024[13] - Diluted net income per share rose 34.5% YoY to $1.56 in Q3 2024[13] - Nine-month net income attributable to Intuitive Surgical, Inc. increased 37.3% YoY to $1,636.9 million[16] - GAAP net income attributable to Intuitive Surgical, Inc. for the nine months ended September 30, 2024, was $1,636.9 million, compared to $1,191.8 million for the same period in 2023[23] - Non-GAAP net income attributable to Intuitive Surgical, Inc. for the nine months ended September 30, 2024, was $1,851.2 million, compared to $1,467.9 million for the same period in 2023[23] - GAAP net income per share attributable to Intuitive Surgical, Inc. - diluted for the nine months ended September 30, 2024, was $4.53, compared to $3.34 for the same period in 2023[23] - Non-GAAP net income per share attributable to Intuitive Surgical, Inc. - diluted for the nine months ended September 30, 2024, was $5.12, compared to $4.11 for the same period in 2023[23] Cash, Investments, and Assets - The Company ended Q3 2024 with $8.31 billion in cash, cash equivalents, and investments, an increase of $628 million during the quarter[3] - Cash, cash equivalents, and investments grew 13.2% to $8,311.5 million as of September 30, 2024[19] - Property, plant, and equipment increased 25.3% to $4,433.0 million as of September 30, 2024[19] - Total assets grew 14.9% to $17,743.4 million as of September 30, 2024[19] - Stockholders' equity increased 17.0% to $15,677.5 million as of September 30, 2024[20] Gross Profit and Expenses - GAAP gross profit for the nine months ended September 30, 2024, was $3,992.0 million, compared to $3,452.1 million for the same period in 2023[23] - Non-GAAP gross profit for the nine months ended September 30, 2024, was $4,092.6 million, compared to $3,543.8 million for the same period in 2023[23] - Share-based compensation expense for the nine months ended September 30, 2024, was $499.8 million, compared to $442.4 million for the same period in 2023[23] - Long-term incentive plan expense for the nine months ended September 30, 2024, was $4.4 million, compared to $5.9 million for the same period in 2023[23] - Amortization of intangible assets for the nine months ended September 30, 2024, was $13.6 million, compared to $15.1 million for the same period in 2023[23] - Litigation charges (recoveries) for the nine months ended September 30, 2024, was $7.2 million, compared to $(4.0) million for the same period in 2023[23]

Core Viewpoint - Intuitive Surgical is set to report earnings, with expectations of a gain of $1.63 per share on $2.02 billion in revenue, while the Whisper number suggests a gain of $1.67 per share [2]. Financial Performance - The company has shown consistent earnings growth, increasing from $3.03 in 2017 to $5.71 in 2023, with projections of $6.64 in 2024 and $7.65 in 2025 [3]. - The current price-to-earnings (P/E) ratio stands at 75, which is 3.1 times that of the S&P 500 [3]. Technical Analysis - The stock is trading approximately 4.4% below its 52-week high and just below its 50-day moving average [4]. - The stock is close to its all-time high of just under $500, indicating potential volatility following the earnings report [4]. Company Overview - Intuitive Surgical, Inc. specializes in developing, manufacturing, and marketing products that enhance minimally invasive care, including the da Vinci Surgical System and Ion endoluminal system [5][6]. - The company provides a range of services, including installation, repair, maintenance, and technical support, alongside integrated digital capabilities for performance enhancement [6]. - Established in 1995 and headquartered in Sunnyvale, California, the company also collaborates with FluoGuide A/S for head and neck cancer treatments [6].

Earnings and Revenue Expectations - Intuitive Surgical is expected to report Q3 2024 revenues of $2 billion and adjusted earnings of $1.60 per share, slightly below consensus estimates [1] - The company's revenue growth is driven by increased procedure volume and placements of the new da Vinci 5 surgical platform [1] Trends Driving Q3 Results - Intuitive Surgical benefits from expanding its installed base, leading to growth in recurring revenues such as consumables [2] - Global da Vinci procedure volume is projected to grow 15.5%-17% in 2024, driving consumables and services revenue [2] - Operating margin is expected to see slight growth, bolstering the company's bottom line [2] Previous Quarter Performance - Q2 revenue was $2.0 billion, reflecting a 6% year-over-year growth, driven by a 17% rise in worldwide da Vinci procedure volume [3] - The company placed 341 da Vinci systems in Q2, including 70 da Vinci 5 systems, increasing the total installed base by 14% year-over-year to 9,203 systems [3] - Operating margin expanded by 340 basis points to 28.2% in Q2, with adjusted earnings of $1.78, a 25% increase over the prior-year quarter [3] Stock Performance and Valuation - ISRG stock has appreciated 45% year-to-date, outperforming the broader markets [4] - The stock is estimated to be valued at $462 per share, slightly below the current market price of $480, based on a 20x P/S multiple [4] - ISRG stock has shown more volatile annual returns compared to the S&P 500, while the Trefis High Quality Portfolio has consistently outperformed with less volatility [4] Peer Comparisons - Intuitive Surgical's valuation and performance can be compared with peers across industries using metrics provided by Trefis [5]

Core Viewpoint - Intuitive Surgical, Inc. (ISRG) is expected to report third-quarter 2024 earnings on October 17, with sales and earnings estimates at $2.02 billion and $1.65 per share respectively, while earnings per share estimates for 2024 and 2025 have remained stable at $6.67 and $7.66 over the past 60 days [1][2] Estimate Movement - The earnings surprise for ISRG in the last reported quarter was 16.34%, with an average surprise of 8.97% over the trailing four quarters [2][3] Factors to Note - ISRG reported sales of $3.27 billion in the first half of 2024, reflecting a year-over-year growth of 13.5%, driven by strong procedure performance and capital placements [5] - The Instruments & Accessories segment is expected to report robust results due to strong da Vinci procedure growth, with a 17% increase in procedures during the second quarter [5][6] - The revenue per procedure increased to approximately $1,800, up about $20 sequentially, although unfavorable currency movements may offset some gains [6] - Sales growth is likely to be supported by China's recovery and rising adoption in Japan and India [6][7] - The Systems segment is expected to reflect strong adoption of the newly launched da Vinci 5, with 70 systems placed in the U.S. during the second quarter [7][8] - The Services segment is anticipated to show strong adoption of digital products and services [8] Price Performance & Valuation - ISRG shares have appreciated 28.8% in the past six months, outperforming the industry growth of 4.2% and the S&P 500 Index's rise of 15% [9] - Currently, ISRG is trading at a forward 12-month P/E of 65.48X, compared to the industry's 32.6X, although this valuation has decreased from a high of 87.37X [10] Investment Thesis - Continued growth in da Vinci procedure volume and strong Ion procedure growth are expected to drive ISRG's performance for the rest of 2024 [11] - The launch of da Vinci SP in Europe and da Vinci 5 in the U.S. is anticipated to boost system placements [11] Conclusion - ISRG's unfavorable Earnings ESP suggests no significant movement post-earnings results, and while the company has a favorable Zacks Rank, its high valuation may deter immediate investment [12][13]

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]