Intuitive Surgical Shares Down 4% on Preliminary Q4 Revenue Miss

Mizuho analysts increased their price target for Intuitive Surgical (NASDAQ:ISRG) to $440 from $390 while maintaining their Neutral rating, ahead of the company’s Q2 earnings, scheduled to be released on Thursday.

The adjustment follows proprietary channel checks for Q2/24, which included interactions with 12 public and private companies, four key opinion leader events, and two in-depth surveys. The analysts cited expectations for the da Vinci 5 system and minimal competitive pressures as reasons for the price target increase.

Intuitive Surgical (NASDAQ:ISRG), renowned for its robotic-assisted surgical technology, reported its fourth-quarter earnings, exceeding analyst expectations.

The company's total revenue for the quarter was $1.93 billion, a 17% increase from the same period last year, surpassing the forecasted $1.89 billion. Its earnings per share (EPS) came in at $1.60, beating the estimated $1.48.

A notable contributor to this year-over-year growth was the Instruments and Accessories segment, which generated $1.14 billion in revenue. This represents a 22% increase from the prior year and matches the expected $1.14 billion.

Intuitive Surgical also showed robust operational performance with its worldwide procedure growth hitting 21%, exceeding the anticipated 19.2%. The company's Da Vinci Surgical System saw its installed base expand to 8,606 units, a 14% annual increase, and slightly above the projection of 8,584 systems.

Adding to the positive sentiment around the stock, Intuitive Surgical announced that it had submitted a 510k application to the FDA for its new da Vinci 5 system, further boosting investor confidence.

Intuitive Surgical (NASDAQ:ISRG) revealed its preliminary results for the fourth quarter, which exceeded the expectations of analysts.

The company announced a preliminary revenue of $1.93 billion, surpassing the anticipated consensus of $1.87 billion. In detail, the revenue from Instruments and Accessories aligned with the forecast at $1.14 billion. However, the revenue from systems notably outperformed predictions, coming in at $480 million against the projected $420.7 million.

Additionally, Intuitive Surgical experienced a significant worldwide procedure growth of around 21%, higher than the expected 18.9%. The company also noted the impact of COVID-19 resurgences in China on their early 2023 procedure volumes. Despite initial challenges, there was a subsequent recovery in procedure volume as infection rates and hospitalizations began to decrease.

Stifel analysts increased their price target for Intuitive Surgical (NASDAQ:ISRG) from $315.00 to $350.00, maintaining a Buy rating. This adjustment follows conversations with two high-volume robotic surgeons specializing in foregut and general surgery procedures.

Firstly, the surgeons conveyed their belief that Intuitive Surgical could potentially launch their next-generation da Vinci system as early as the first half of 2024. They anticipate that many of the upgrades in the next-gen da Vinci system would be software-based, rather than solely hardware improvements.

The surgeons expect the patient cart in the new system to be similar to the current generation's technology. However, they foresee significant visual enhancements in the next-gen model. This includes improvements in Firefly imaging, which could provide better illumination of vessels and tumors, and the integration of CT images for enhanced visual assistance during surgeries.

Additionally, the surgeons highlighted other possible improvements in the next-gen system. These include the introduction of haptic feedback, which would offer tactile feedback to the surgeon, and potentially integrated insufflation capabilities, which could enhance the efficiency and safety of surgical procedures. These advancements, as discussed by the surgeons, underline the potential for significant developments in robotic-assisted surgery, reinforcing the positive outlook for Intuitive Surgical.

Intuitive Surgical (NASDAQ:ISRG) released its third-quarter results, reporting a mixed performance with earnings surpassing expectations but revenue falling short, leading to an over 4% drop intra-day today for the company’s shares.

The company reported earnings per share (EPS) of $1.46 on revenue of $1.74 billion. Street estimates stood at $1.42 for EPS and at $1.77 billion for revenues.

Intuitive Surgical shipped 312 da Vinci Surgical Systems in the quarter, up from 305 in the third quarter of the previous year.

Deutsche Bank analysts adjusted their price target downward by $60 to $275 per share for the Hold-rated stock. They attributed the selloff to pressures from GLP1 on the bariatrics business and challenges related to China.

Intuitive Surgical (NASDAQ:ISRG) shares jumped more than 10% today after the company reported its Q1 results, with EPS coming in at $1.23, better than the Street estimate of $1.19. Revenue was $1.7 billion, beating the Street estimate of $1.59 billion, due to strong procedure volumes (up 26% year-over-year) and higher system placements.

The company raised its fiscal 2023 procedure volume guidance (to 18–21% from 12–16%), with the low end assuming continued choppiness with Covid hospitalizations, uncertainty regarding the timing of the capital quota in China for the remainder of the year, macroeconomic challenges impacting hospital procedure volumes, and moderation in procedures from elevated levels experienced in January and February this year.