In March, robotic surgery leader Intuitive Surgical received clearance from the U.S. Federal Drug Administration for the da Vinci 5 next-generation multiport robotic system. Now ISRG stock continues to tease a new breakout as rivals Medtronic and Johnson & Johnson battle for a piece of what's projected to be an $18 billion opportunity.
Building on an all-time high it hit earlier this month, Intuitive Surgical earns a spot on the IBD Breakout Stocks Index, which gets updated weekly.
While the innovator in minimally invasive, robot-assisted surgery did not make this month's list of new buys by the best mutual funds, an impressive 124 funds with an A+ rating from IBD own shares of ISRG stock. Such current institutional demand hints at how Intuitive Surgical managed to weather a sharp downturn in 2022 before rebounding to its recent record high.
Demand for the stock also reflects a return to solid earnings growth in 2023 and this year.
In its latest quarterly report on April 18, Intuitive Surgical reported 22% earnings growth to $1.50 a share. Wall Street expects solid EPS gains of 35%, 36% and 24%, respectively, in Q2, Q3 and Q4. For the full year, analysts forecast an 11% gain to $6.32 per share.
Sales growth remains solid and steady. Year-over-year gains have ranged from 11% to 17% over the past five quarters. Analysts expect a 12% gain to just under $1.7 billion when Intuitive Surgical reports second-quarter earnings and sales numbers in July.
See Who Joins Intuitive Surgical On The IBD Breakout Stocks Index
Intuitive Surgical Leads, But Challenges (And Challengers) Arise
In March, the FDA provided clearance for da Vinci 5, Intuitive Surgical's next-generation multiport robotic system. Enhancements to the next-gen da Vinci system include first-0f-its-kind force-sensing technology, which enables the da Vinci system to measure — and surgeons to feel — subtle forces exerted on tissue during surgery.
As profiled in a recent feature story in IBD, robotic surgery is a fast-growing market, projected to be an $18 billion opportunity. While Intuitive Surgical currently leads, challenges to its supremacy have emerged from Medtroic and Johnson & Johnson. Intuitive Surgical has also encountered unexpected "choppiness," with analysts expressing some concerns that the da Vinci 5 will be slow to take off.
Intuitive Surgical Builds On Its Robotic Surgery Prowess. But Challengers Are Coming.
ISRG Stock Posts Rocky Rebound To Record High
After dropping sharply from a new high at the end of 2021, Intuitive Surgical sank to a new low in October of 2022. ISRG stock then launched an impressive, but decidedly roller-coaster-like rebound to its new all-time high earlier this month.
Having climbed back above its 10-week moving average, Intuitive Surgical has now formed a third-stage flat base with a 403.76 buy point. Note that such later-stage patterns entail more risk and are more prone to failure.
Intuitive Surgical flashed five straight up weeks as it retook its 10-week line and rolled into a new buy zone. Since then, the stock has teetered right around the 403.76 entry. In a sign of rebounding technical strength, note how the 21-day exponential moving average has just crossed back above the longer-term 50-day line.
On Wednesday, Intuitive Surgical edged lower in light volume, closing 1% shy of its buy point.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
