Intuitive Surgical (ISRG) shares experienced a notable surge after the company released its impressive third-quarter earnings, exceeding analysts’ expectations. In a robust performance, Intuitive Surgical reported an adjusted earnings per share of $1.84, significantly surpassing the forecast of $1.64 and reflecting a commendable 26% year-over-year growth. Additionally, the company’s revenue rose by 17% to reach $2.04 billion, outpacing the anticipated $2.01 billion, as highlighted by FactSet.
Key to this success was the substantial growth in the number of procedures utilizing Intuitive Surgical’s renowned robotic system, the da Vinci. The volume of these procedures increased by 18%, a crucial metric for investors since higher procedure counts lead to increased purchases of high-margin single-use instruments and accessories. Sales of these instruments surged by 18% to $1.26 billion, again exceeding expectations, which called for $1.24 billion.
In after-hours trading, Intuitive Surgical’s stock jumped over 6%, trading above the 50-day moving average, reflecting increased investor confidence. The stock has soared by more than 40% this year alone.
Intuitive Surgical is also two quarters into the soft launch of its next-generation robotic system, the da Vinci 5, which analysts believe could serve as a significant growth catalyst in 2025. In the recent quarter, the company successfully placed 379 new systems, marking a 21.5% increase compared to the previous year, with 110 of these being the new da Vinci 5 models.
Analysts at RBC Capital Markets have expressed optimism regarding Intuitive Surgical, noting that the upcoming full launch of the da Vinci 5 could initiate a multiyear cycle of equipment replacements starting in 2025. As procedure growth holds steady, with a narrow beat of Wall Street estimates (18% against the predicted 17.6%), market sentiment toward Intuitive Surgical remains strong, positioning the stock favorably as we approach year-end.
Moreover, the company reported a remarkable 73% increase in lung biopsies conducted using its Ion robotic system, underscoring the growing adoption of its technological advances in the surgical field. Despite typical third-quarter slowdowns in procedure volume, indications of robust capital investment align well with Intuitive Surgical’s growth trajectory.
Considering the high expectations surrounding Intuitive Surgical, analysts suggest that this stock is one to watch closely as it enters the year-end. For investors, any dips in share price may present optimal opportunities to buy into this promising company, especially with the potential for significant momentum heading into 2025.
For those looking for comprehensive stock insights, this performance report reaffirms the importance of strategic investment in high-quality companies like Intuitive Surgical, where technology meets growth potential. The future looks bright, and market participants are eager for what’s next.