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Sunnyvale, California-based Intuitive Surgical, Inc. (ISRG) develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care. Valued at $172.6 billion by market cap, the company offers endoscopes, endoscopic retractors and dissectors, scissors, scalpels, forceps, needle holders, electrocautery, ultrasonic cutters, and accessories during surgical procedures.
Shares of this global technology leader in robotic-assisted minimally invasive surgery have outperformed the broader market considerably over the past year. ISRG has gained 67.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27%. In 2024, ISRG stock is up 44.2%, surpassing SPX’s 18.1% rise on a YTD basis.
Zooming in further, ISRG’s outperformance looks more pronounced compared to the SPDR S&P Health Care Equipment ETF (XHE). The exchange-traded fund has gained about 3.2% over the past year. Moreover, ISRG’s double-digit gains on a YTD basis outshine the ETF’s 5.4% returns over the same time frame.
ISRG’s bullish price performance can be attributed to growth in da Vinci procedure volume and an increase in system installations. Demand for the da Vinci robotic surgical device is high, with 341 systems recently placed in medical facilities. The new da Vinci 5 is experiencing higher-than-expected demand, with 70 systems installed in Q2.
On Jul. 18, ISRG reported its Q2 earnings results, and its shares closed up more than 9% in the following trading session. Its adjusted EPS of $1.78 surpassed consensus estimates of $1.54. The company’s revenue stood at $2 billion, up 14.2% year over year.
For the current fiscal year, ending in December, analysts expect Intuitive Surgical’s EPS to grow 28.9% to $5.22 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 24 analysts covering ISRG stock, the consensus is a “Moderate Buy.” That’s based on 15 “Strong Buy” ratings, two “Moderate Buys,” and seven “Holds.”
This configuration is more bullish than a month ago, with 14 analysts suggesting a “Strong Buy.”
On Aug. 16, RBC Capital analyst Shagun Singh Chadha reiterated a “Buy” rating on ISRG with a price target of $515, implying a potential upside of 5.8% from current levels.
While ISRG currently trades above its mean price target of $472.74, the Street-high price target of $560 suggests an upside potential of 15.1%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
