ISRG Stock Price Falls to 200-DMA: Should You Buy, Hold or Sell?

Core Viewpoint - Intuitive Surgical (ISRG) has experienced a significant decline in share price recently, following a period of substantial growth driven by strong demand for its robotic surgery systems, particularly the da Vinci platform, raising concerns about its valuation relative to the industry [1][2]. Financial Performance - ISRG reported fourth-quarter 2024 revenues of $2.41 billion, a 25.2$8.4 billion, reflecting a 17% year-over-year growth [7]. - The company achieved earnings per share (EPS) growth of 2%, bringing the EPS to $2.21, and maintained a pro forma operating margin of 38% [7]. - Recurring revenues now account for 84% of total earnings, indicating a strong revenue generation model [7]. Market Trends and Growth - The volume of da Vinci procedures increased by 17% in 2024, with expectations for continued growth in 2025 [9]. - International markets, including India, the U.K., Italy, and Japan, experienced robust growth of 25% year-over-year, supported by recent investments and approvals [10]. - The Da Vinci SP and Ion platforms saw growth rates of 81% and 78% respectively, driven by strong demand in key international markets [12][13]. Strategic Initiatives - ISRG plans to invest EUR 290 million to directly market its da Vinci products in Italy, Spain, and Portugal, enhancing customer relationships [15]. - The company is expanding its manufacturing capabilities with new facilities in California, Germany, and Bulgaria to support production for the Da Vinci 5 and Ion systems [15]. Competitive Landscape - ISRG faces increasing competition in the robotic-assisted surgery market from major players like Johnson & Johnson and Medtronic, as well as from Chinese manufacturers offering competitive alternatives [19]. - Economic pressures in Europe and the rise of GLP-1 weight-loss drugs are impacting ISRG's procedure growth, particularly in the bariatric segment [20]. Future Outlook - ISRG projects procedural growth of 13-16% in 2025, while gross profit margins are expected to moderate to 67-68% due to increased depreciation expenses and a shift towards lower-margin products [26]. - The company is navigating macroeconomic challenges, including potential tariff risks and geopolitical tensions that could affect its global expansion and profitability [19][22].