ISRG Expands Installed Base, But Is Utilization Keeping Pace?

Core Insights - Intuitive Surgical (ISRG) has achieved a 15% year-over-year increase in da Vinci system installations, surpassing 10,000 units globally, with 367 systems placed in Q1 2025, including 147 next-gen da Vinci 5 systems, driven by strong U.S. demand [1][10] - Recurring revenues constitute 85% of total revenues, with overall procedures growing 17% year-over-year; however, average system utilization increased only 2%, indicating a potential issue with return on investment for hospitals [2][3] - The limited growth in core platform utilization raises concerns about hospital ROI post-installation, prompting management to focus on training and digital adoption to enhance throughput [3][4] Competitive Landscape - Stryker (SYK) reported record Mako installations in Q1 2025, driven by strong demand in orthopedics, with high utilization rates particularly in knee and hip procedures [5] - Stryker plans to launch Mako Spine later in 2025 and Mako Shoulder in early 2026, aiming to expand its robotic offerings across specialties [6] - Zimmer Biomet's (ZBH) ROSA robotics platform is seeing ongoing adoption in knee procedures, although results are more muted compared to competitors; the system is central to ZBH's robotic strategy for 2025 [7][8] Financial Performance - ISRG shares have gained 2.4% year-to-date, contrasting with a 7.7% decline in the industry [9] - The forward price-to-earnings ratio for ISRG stands at 64.35, above the industry average but lower than its five-year median of 72.21, with a Value Score of D [12] - The Zacks Consensus Estimate for ISRG's 2025 earnings suggests a 6.8% increase from the previous year [13]