Can Intuitive Surgical Weather GLP-1 Drag on Bariatric Surgery?

Core Insights - Intuitive Surgical (ISRG) is experiencing a decline in U.S. bariatric surgery volumes, attributed to the rapid adoption of GLP-1 weight-loss drugs, with six consecutive quarters of high single-digit declines [1][10] - Bariatric procedures now account for less than 3% of U.S. da Vinci procedures, and the decline shows no signs of stabilization [2][10] - Despite the challenges in bariatric surgery, Intuitive Surgical is seeing growth in other areas, particularly benign general surgery, which includes procedures like cholecystectomy and hernia repair [3][10] Bariatric Surgery Impact - The ongoing decline in bariatric surgery volumes is linked to mixed patient behaviors regarding GLP-1 therapies, with some patients discontinuing due to costs or side effects [2] - Surgeons report uncertainty in predicting when bariatric procedure volumes may stabilize, indicating a challenging environment for the company [2] Growth in Other Areas - Intuitive Surgical is offsetting the decline in bariatric procedures with strong growth in benign general surgery, which is supported by the adoption of the da Vinci 5 platform that enhances efficiency and utilization rates [3][4] - International markets are also contributing positively, with general surgery and other procedures growing between 26% to 39% year-over-year outside the U.S. [5] Competitive Landscape - Other medical-device companies, such as Medtronic and Teleflex, are similarly affected by the rise of GLP-1 drugs impacting bariatric procedures, but they view this as a near-term challenge rather than a complete replacement of surgical options [7][10] - Medtronic is focusing on faster-growing segments to mitigate the impact of declining bariatric volumes, with significant growth in cardiac ablation and other areas [9] Financial Performance - Intuitive Surgical's shares have increased by 6.5% year-to-date, outperforming the industry average of 2% [13] - The company has a forward price-to-earnings ratio of 58.42, which is above the industry average but lower than its five-year median of 71.54 [14] - The Zacks Consensus Estimate indicates a projected earnings growth of 17.3% for 2025 compared to the previous year [15]