ISRG Stock Rallies 14% in 3 Months: Is It Still Worth Buying?

Core Viewpoint - Intuitive Surgical (ISRG) has experienced significant stock growth, driven by strong demand for its robotic surgery procedures, particularly the newly launched da Vinci 5 system, which is expected to continue attracting investors throughout 2024 [1][3]. Group 1: Stock Performance and Market Trends - ISRG shares have risen 14.2% in the past three months, outperforming the Zacks Medical - Instruments industry's growth of 3.8% and the broader Zacks Medical sector's return of 5.4% [1]. - Year-to-date, ISRG stock has increased by 45.7%, primarily due to strong demand for robotic surgery procedures [1]. - The company expects procedure volume to grow by 14-17% in 2024, indicating a continued upward trend in revenue [3]. Group 2: Product Developments and Market Penetration - The da Vinci 5 system, launched in March, is showing strong uptake and is expected to drive market penetration with its advanced imaging capabilities [1][6]. - The installed base of the da Vinci system grew approximately 14% year-over-year during the second quarter of 2024 [6]. - The Ion endoluminal system, launched in 2019, has also seen significant growth, with its installed base increasing by approximately 56% year-over-year to 678 units [7]. Group 3: Financial Outlook - The Zacks Consensus Estimate for 2024 revenues reflects a year-over-year improvement of 13.7% [3]. - ISRG expects gross margin in 2024 to be between 68.5% and 69%, higher than 68% in 2023, driven by strong uptake of da Vinci 5 and improved supply challenges [5]. - The Zacks Consensus Estimate for 2024 earnings is currently pegged at $6.67 per share, indicating a 16.8% year-over-year improvement [5]. Group 4: Competitive Landscape and Challenges - ISRG faces competition from established companies like Johnson & Johnson and Medtronic, which may impact its market position [8]. - The company has maintained its guidance for full-year 2024 despite potential headwinds from soft demand for bariatric procedures and challenges in Asia [4][8]. - Ongoing supply-chain constraints and geopolitical tensions may affect the availability of devices, impacting growth [9].