Intuitive Surgical Stock Declines 0.7% in a Month: Is It Losing Steam?

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].