Key Points Intuitive Surgical is looking at a vast long-term opportunity in its market. The company's moat practically guarantees it will remain a leader in the field. This strong position in its industry can allow it to overcome the challenges it faces. 10 stocks we like better than Intuitive Surgical › Intuitive Surgical (NASDAQ: ISRG), which specializes in the robotic-assisted surgery market, has had a difficult year. The company is facing a significant threat from the impact of President Donal ...

Core Viewpoint - Intuitive Surgical (ISRG) has experienced a decline in share price despite reporting better-than-expected financial results, primarily due to concerns over gross margin contraction and increased competition in the robotic surgery market [1][3][24]. Financial Performance - ISRG shares have lost 13.4% in the past three months, underperforming the industry and the S&P 500 Index, which rose by 0.1% and 10.4%, respectively [1]. - The company reported an adjusted gross profit of $1.66 billion, up 17.8% year over year, but the gross margin decreased to 67.9%, down approximately 200 basis points from the prior-year quarter [15]. - ISRG forecasts a gross margin contraction of 200-300 basis points for 2025, influenced by tariffs and product mix shifts [6][15]. Market Position and Growth Drivers - ISRG is a leader in the robotic-assisted surgery market, with its da Vinci systems dominating both the U.S. and global markets [8]. - The global surgical robots market is expected to grow at a CAGR of nearly 9.4% from 2025 to 2030, positioning ISRG to benefit from this growth [8]. - The company has raised its full-year 2025 procedure growth guidance to 15.5-17%, driven by increased demand for various surgical procedures [11]. Revenue Composition - Recurring revenues from the sale of accessories accounted for 85% of total sales in the first half of 2025, highlighting the importance of instruments and accessories [13]. - Revenue per procedure remained stable at approximately $1,780-$1,800, despite pressures from declining bariatric surgeries [13]. Competitive Landscape - ISRG faces increasing competition from major players like Medtronic and Johnson & Johnson, which are introducing cost-effective and modular robotic systems [21][22]. - Medtronic's Hugo system and J&J's Ottava system are expected to gain traction in the U.S. market, posing challenges to ISRG's market share [22][23]. Challenges - The company is experiencing moderating growth in bariatric procedures due to the introduction of new drugs targeting obesity, which may impact future top-line growth [18]. - Budget constraints in international markets are limiting the adoption of da Vinci systems, particularly in developing regions [19][20]. - Macroeconomic pressures and rising inflation are forcing governments to prioritize essential healthcare over capital-intensive robotic platforms [20]. Valuation - ISRG is considered overvalued, with a forward 12-month Price/Earnings (P/E) ratio of 50.56, significantly higher than the sector average of 27.51 [24].

Core Insights - Medtronic announced the results of the Enable Hernia Repair clinical study, the first Investigational Device Exemption (IDE) clinical study for robotic-assisted hernia surgery in the U.S. [1][2] Company Overview - Medtronic plc is a leading global healthcare technology company headquartered in Galway, Ireland, with over 95,000 employees across more than 150 countries [11]. - The company focuses on innovative technologies that address various health conditions, including surgical robotics, and aims to alleviate pain, restore health, and extend life [11]. Clinical Study Findings - The Enable Hernia Repair study included 193 patients undergoing robotic hernia repair, achieving a surgical success rate of 100%, exceeding the pre-specified goal of 85% [8]. - The study met primary safety endpoints, with a surgical site event (SSE) rate of 0.0% for inguinal patients and 2.1% for ventral patients, both significantly lower than the predetermined performance goal of 30% [8]. - The mean length of hospital stay was reported as 4.7 hours for inguinal patients and 6.7 hours for ventral patients [5]. Market Context - Approximately 1.5 million hernia repair surgeries are performed annually in the U.S., making it one of the most common surgeries for adults [4]. - The introduction of the Hugo robotic-assisted surgery system aims to enhance surgical options and improve patient care in hernia repair [6][3]. Future Prospects - Medtronic is currently under review by the FDA for a urology indication, with plans for further expansions into hernia repair and gynecology [9]. - The Hugo RAS system is already clinically used in over 30 countries, indicating a strong international presence [7].

Company Overview - Intuitive Surgical (ISRG) received FDA clearance for its Vessel Sealer Curved, a multifunctional instrument for da Vinci surgical systems, enhancing procedural efficiency in minimally invasive surgeries [2][5] - The Vessel Sealer Curved integrates advanced bipolar energy technology with refined mechanical design, improving performance and precision in robotic-assisted surgeries [3][9] - The new instrument can grasp, dissect, coagulate, and transect tissue, increasing procedural efficiency and broadening the appeal of robotic-assisted surgery across specialties [5][10] Financial Performance - ISRG has a market capitalization of $183.59 billion and an earnings yield of 1.45%, which is higher than the industry's negative 2.88% [6] - In the last reported quarter, ISRG delivered an earnings surprise of 5.85% [6] Stock Performance - Following the FDA clearance announcement, ISRG shares traded flat, with a year-to-date loss of 1.8%, compared to the industry's 11.5% decline and the S&P 500's gain of 5.6% [4] Industry Prospects - The global surgical robots market is projected to grow from $4.31 billion in 2024 to $7.42 billion by 2030, with a CAGR of 9.42% from 2025 to 2030, driven by technological innovation and increasing investments [13]

Core Insights - Intuitive Surgical (ISRG) and Medtronic (MDT) are competing in the robotic-assisted surgery market, with ISRG's da Vinci system being the industry leader and MDT's Hugo platform emerging as a challenger [1][2] Market Performance - Year-to-date, ISRG shares have increased by 5.8%, while MDT shares have risen by 1.7%, compared to a 0.2% increase in the S&P 500 Index [5] Intuitive Surgical (ISRG) - ISRG holds a dominant position in robotic-assisted surgery with nearly 10,000 da Vinci systems installed globally, reflecting its technological advantage and integration in hospitals [6] - The company benefits from robust recurring revenues from instrument and accessory sales, which scale with increased surgical procedures [7] - ISRG is focusing on AI integration, real-time analytics, and next-generation robotics to enhance its platform, supported by recent FDA approvals in urology and gynecology [8] - The Zacks Consensus Estimate for ISRG's fiscal 2025 sales and EPS indicates a year-over-year improvement of 15.6% and 7.1%, respectively [9] Medtronic (MDT) - MDT has a diversified product portfolio and is focusing on its Hugo robotic-assisted surgery platform to compete with ISRG, although it faces regulatory hurdles and limited market penetration [11] - The company maintains solid revenue from legacy businesses and is implementing cost-saving initiatives to improve margins [12] - The Zacks Consensus Estimate for MDT's 2025 sales and EPS suggests a year-over-year improvement of 8.6% and 10.4%, respectively [14] Competitive Landscape - ISRG commands nearly 80% market share in robotic surgery, with sustainable revenue growth of 19% and a strong portfolio [16] - MDT's Hugo platform has shown early adoption potential but is still under limited commercial release, with full FDA approval expected next year [16] - The robotic-surgery market is projected to grow at a CAGR of 16.5% through 2029, favoring ISRG's continued growth [16]

Core Insights - Intuitive Surgical Inc reported first-quarter 2025 revenue of $2.25 billion, exceeding analyst estimates of $2.19 billion, with a year-over-year increase of 19% [1] - The company placed 367 da Vinci surgical systems in the quarter, up from 313 in the same quarter of the previous year, leading to a total installed base of 10,189 systems, a 15% increase year-over-year [1] - Adjusted earnings for the first quarter were $1.81 per share, surpassing analyst expectations of $1.72 per share [2] Revenue and Growth - Worldwide da Vinci procedures increased by approximately 17% year-over-year, with guidance for a full-year increase of 15%-17% [1][2] - The company expects a gross profit margin of 65% to 66.5% in 2025, accounting for an estimated 1.7% impact from tariffs [3] Analyst Perspectives - Analysts believe the stock deserves a premium multiple due to elevated procedure growth and a new product cycle that could drive significant revenue and EPS growth [4] - Concerns about macro dynamics and potential Medicaid cuts may impact stock performance, but management noted that U.S. capital spending remains stable [4][5] - The company's leasing model is aiding hospitals in managing tight budgets, although potential Medicaid cuts could significantly affect hospital finances [5] Financial Position - The company has a strong cash position of $9.1 billion and zero debt, providing flexibility for share buybacks [6] - Stifel maintains a price target of $670 with a Buy rating, while Truist Securities has adjusted its price target from $605 to $590 but maintains a Buy rating [3][6] Stock Performance - ISRG stock increased by 2.47% to $490.58 [7]

Core Insights - Intuitive Surgical has been a leader in minimally invasive robotic-assisted surgery, achieving a remarkable stock return of 24,632% since its IPO in 2003 [1][2] - Recent global economic concerns and a mixed outlook have led to an 18% decline in shares from their all-time high in January [2] - The da Vinci system has seen significant growth, with nearly 2.7 million procedures performed in 2024, doubling the volume from five years ago [2] Company Developments - The new da Vinci 5 system, approved by the FDA, features over 150 design advancements and 10,000 times more computing power than the previous model, expected to drive future sales growth [3] - The company anticipates a 13% to 16% increase in da Vinci procedure volume for 2025, a slight slowdown from the previous year's 17% growth [4] - Earnings per share (EPS) is projected to grow by 9.6% in 2025, down from 28.5% last year, but analysts expect a rebound to 17.5% growth in 2026 [5][6] Financial Metrics - Revenue growth estimates are 17.2% for 2024, 14.9% for 2025, and 15.6% for 2026 [7] - EPS is projected at $7.34 for 2024, $8.06 for 2025, and $9.47 for 2026 [7] Competitive Landscape - The competitive environment is evolving, with new entrants like Medtronic's Hugo system and Johnson & Johnson's Ottava robot potentially impacting Intuitive's market share [9][10] - CFO Jamie Samath acknowledged that increased competition could lead to longer selling cycles for Intuitive's products [11] Valuation Concerns - Intuitive Surgical's stock is trading at a forward P/E ratio of 63, slightly above its decade average of 62, raising concerns about potential downside if growth expectations are not met [12] - The company is viewed as a leader in healthcare technology, but current stock valuations may deter aggressive investment [13]

Core Insights - Intuitive has published two peer-reviewed studies demonstrating the effectiveness of its Force Feedback technology in the da Vinci 5 surgical system, which enhances robotic-assisted surgery by allowing surgeons to feel the forces applied to tissue [1][2][8] Group 1: Study Findings - The first study indicated that Force Feedback technology can reduce the force applied to tissue by up to 43%, regardless of the surgeon's experience level, based on evaluations from 28 surgeons [3][4][5] - The second study highlighted that Force Feedback technology improves novice surgeon performance by reducing tissue trauma and errors during suturing, as well as decreasing the time required to complete suturing tasks, evaluated with 29 novice surgeons [6][7] Group 2: Clinical Implications - The studies suggest that the lack of a way to measure forces during surgery can lead to unintentional tissue damage, which may negatively impact patient outcomes such as pain and recovery time [4][5] - The findings indicate that Force Feedback technology could enable gentler robotic surgery, with potential benefits for surgical performance and patient outcomes, although further research is needed to understand its clinical implications [5][8] Group 3: Future Developments - Intuitive is currently expanding the availability of Force Feedback technology in hospitals across the United States and plans to continue its research and development through 2025 and beyond [8]

Core Insights - Intuitive has published two peer-reviewed studies demonstrating the effectiveness of its Force Feedback technology in the da Vinci 5 surgical system, which enhances robotic-assisted surgery by allowing surgeons to feel the forces applied to tissue [1][2][8] Group 1: Force Feedback Technology - Force Feedback technology can reduce the force applied to tissue during surgery by up to 43%, regardless of the surgeon's experience level [3][5] - The technology aims to minimize unintentional tissue damage during surgery, which can lead to negative clinical outcomes such as increased pain and longer recovery times [4][5] Group 2: Study Findings - The first study involved 28 surgeons and showed significant reductions in force applied during surgical tasks, indicating improved performance with the use of Force Feedback technology [3][6] - The second study focused on 29 novice surgeons and found that Force Feedback technology could significantly reduce tissue trauma and errors during suturing, as well as decrease the time required to complete suturing tasks [6][7] Group 3: Future Implications - The studies provide early evidence of the potential benefits of Force Feedback technology across all levels of surgical experience, with ongoing research planned to further understand its clinical impact [8] - Intuitive is expanding the availability of Force Feedback technology in hospitals across the United States through 2025 and beyond [8]

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% year-over-year increase, with full-year revenues reaching $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].