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ISRG Nears $600: Can the Stock Breach the Mark Again This Month?
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Shares of Intuitive Surgical (ISRG - Free Report) breached $600 on Jan. 21 but failed to sustain the level. The stock price fell below the psychological level after only three trading sessions, which closed at $595.55 on Feb. 17. Although the stock has shown a strong uptrend since November 2023, shares are trading at a significant premium to the industry’s valuation, raising concerns.
In the past six months, ISRG’s shares have surged 22.7% against the Zacks Medical - Instruments industry’s decline of 0.8% and the broader Zacks Medical sector’s fall of 10.8%. The S&P 500 Index has returned 22.7% in the same period. The uptrend is primarily driven by strong demand for its robotic surgery procedures.
Six-Month Price Performance
Image Source: Zacks Investment Research
Intuitive Surgical continues to redefine the robotic-assisted surgery landscape with strong revenue and procedural growth. As the company moves into 2025, the strategic focus will be on expanding its footprint through cutting-edge technology, targeted international expansion and robust manufacturing capabilities.
Financial Performance and Revenue Growth
ISRG reported fourth-quarter 2024 revenues of $2.41 billion, marking a 25.2% year-over-year increase. Full-year revenues of $8.4 billion represent a 17% year-over-year growth, underlining the company’s ability to generate consistent, recurring revenues — now 84% of total earnings. ISRG recorded strong earnings per share (EPS) growth of 2% (to $2.21) and a pro forma operating margin of 38%. The company anticipates a declining operating margin in 2025 due to increased depreciation expenses and a higher mix of lower-margin products like da Vinci 5, Ion and SP.
ISRG’s Da Vinci procedure volume increased 17% in 2024, with continued growth expected in 2025. The company is positioning itself for sustained expansion through innovation and international market penetration. The U.S. market will continue to drive growth in general surgery procedures, particularly in cholecystectomy, foregut, and appendectomy procedures, although bariatric procedures may see headwinds due to the increasing adoption of GLP-1 weight loss medications.
International markets, including India, the UK, Italy and Japan, showed robust 25% year-over-year growth, supported by recent investments and approvals. System utilization trends also indicate increasing adoption, with multiport systems rising 3%. The Da Vinci SP and Ion platforms saw 12% and 13% growth, respectively.
The Da Vinci 5 system, with 362 placements in 2024, is set for a broad commercial launch in mid-2025. ISRG is set to introduce hardware and software upgrades to further enhance the system’s capabilities. New force feedback technology promises a 55% reduction in maximum exerted force during suturing, positioning ISRG at the forefront of precision surgery.
Meanwhile, the Ion robotic platform saw a 78% surge in procedures, with international expansion gaining momentum, particularly in Europe, Korea and China. AI-driven lung models and high-precision capabilities will continue to enhance Ion’s global adoption.
The Da Vinci SP system also experienced accelerated growth, with an 81% year-over-year increase, driven by strong demand in Korea, Japan and Europe. New regulatory approvals in the United States for thoracic and colorectal procedures could further drive adoption in 2025.
ISRG Stock Trades Above 50-Day Average
Image Source: Zacks Investment Research
Strategic Investments and Market Penetration
To fuel further expansion, ISRG has planned to directly market its da Vinci products in Italy, Spain, and Portugal at a cost of EUR 290 million, deepening its customer relationships. Manufacturing expansion continues with new facilities in California, Germany and Bulgaria, ensuring scalable production for Da Vinci 5 and Ion systems. Additionally, digital tools, such as the My Intuitive app and VR simulators, should improve surgeon training and optimize procedural outcomes.
Estimates Movement Over 60 Days
Image Source: Zacks Investment Research
Competitive Challenges and Market Headwinds
Despite its market dominance, ISRG faces rising competition from Johnson & Johnson (JNJ - Free Report) and Medtronic (MDT - Free Report) , both investing heavily in robotic surgery. Chinese manufacturers are also offering competitive alternatives, intensifying pricing pressures in the region. Capital constraints in Europe and delays in Japan could slow hospital adoption of ISRG’s robotic platforms. Moreover, geopolitical risks, including tensions in China, the Russia-Ukraine conflict, and Indo-Pacific instability, may pose headwinds to global expansion.
Intuitive Surgicalalso faces increasing competition from international robotic surgery companies, particularly in China, where local firms are introducing competitive systems. Additionally, ISRG is contending with capital constraints in Europe and pressures in the U.S. bariatric segment that may affect its procedure growth.
To address these challenges, ISRG is working on expanding its regulatory reach and emphasizing the unique value propositions of its product portfolio. However, retaining its dominant position may call for continued innovation, cost management and an ability to navigate complex international regulatory environments.
Rising geopolitical tension, along with war raging in Middle Eastern countries and the continued Russia-Ukraine war, is leading to uncertainty. Apart from these, China and India are having border disputes. Moreover, the fall of the government in Bangladesh is raising chaos in the Indo-Pacific region. Any escalation of these situations can hurt economic progress globally, affecting ISRG’s top and bottom-line performances.
ISRG’s P/E F12M Higher Than Industry
Image Source: Zacks Investment Research
Wrapping Up
Looking forward, ISRG projects 13-16% procedural growth in 2025, balancing expansion opportunities with market challenges. China’s competitive landscape remains uncertain but could see recovery if market conditions stabilize. Hospital capital spending constraints in Europe may affect adoption rates, while bariatric procedure trends will be closely monitored as new weight-loss solutions gain traction.
Additionally, gross profit margins are expected to moderate to 67-68% in 2025, impacted by increased depreciation expenses from new facility investments, a shift toward lower-margin products, such as the Da Vinci 5, Ion and SP systems, and stronger U.S. dollar effects on international revenue streams.
ISRG currently carries a Zacks Rank #3 (Hold). Moreover, the style scores don’t look quite promising. The company has a Value score of D and a Growth score of C. The valuation chart also shows the significant premium for ISRG stock compared to the industry. The valuation is also near its 5-year high and a move toward the mean may start as evident historically, taking stock price down. However, the timeline remains uncertain.
As such, we believe that investors may continue to hold the stock now but we caution against any new position. ISRG’s shares reached $616 on Jan. 23 and have been trading below the $600-level since then. The recent high in the stock price is likely to act as a strong resistance in the upcoming period.
Image: Shutterstock
ISRG Nears $600: Can the Stock Breach the Mark Again This Month?
Shares of Intuitive Surgical (ISRG - Free Report) breached $600 on Jan. 21 but failed to sustain the level. The stock price fell below the psychological level after only three trading sessions, which closed at $595.55 on Feb. 17. Although the stock has shown a strong uptrend since November 2023, shares are trading at a significant premium to the industry’s valuation, raising concerns.
In the past six months, ISRG’s shares have surged 22.7% against the Zacks Medical - Instruments industry’s decline of 0.8% and the broader Zacks Medical sector’s fall of 10.8%. The S&P 500 Index has returned 22.7% in the same period. The uptrend is primarily driven by strong demand for its robotic surgery procedures.
Six-Month Price Performance
Image Source: Zacks Investment Research
Intuitive Surgical continues to redefine the robotic-assisted surgery landscape with strong revenue and procedural growth. As the company moves into 2025, the strategic focus will be on expanding its footprint through cutting-edge technology, targeted international expansion and robust manufacturing capabilities.
Financial Performance and Revenue Growth
ISRG reported fourth-quarter 2024 revenues of $2.41 billion, marking a 25.2% year-over-year increase. Full-year revenues of $8.4 billion represent a 17% year-over-year growth, underlining the company’s ability to generate consistent, recurring revenues — now 84% of total earnings. ISRG recorded strong earnings per share (EPS) growth of 2% (to $2.21) and a pro forma operating margin of 38%. The company anticipates a declining operating margin in 2025 due to increased depreciation expenses and a higher mix of lower-margin products like da Vinci 5, Ion and SP.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Rising Procedure Volume and Market Expansion
ISRG’s Da Vinci procedure volume increased 17% in 2024, with continued growth expected in 2025. The company is positioning itself for sustained expansion through innovation and international market penetration. The U.S. market will continue to drive growth in general surgery procedures, particularly in cholecystectomy, foregut, and appendectomy procedures, although bariatric procedures may see headwinds due to the increasing adoption of GLP-1 weight loss medications.
International markets, including India, the UK, Italy and Japan, showed robust 25% year-over-year growth, supported by recent investments and approvals. System utilization trends also indicate increasing adoption, with multiport systems rising 3%. The Da Vinci SP and Ion platforms saw 12% and 13% growth, respectively.
The Da Vinci 5 system, with 362 placements in 2024, is set for a broad commercial launch in mid-2025. ISRG is set to introduce hardware and software upgrades to further enhance the system’s capabilities. New force feedback technology promises a 55% reduction in maximum exerted force during suturing, positioning ISRG at the forefront of precision surgery.
Meanwhile, the Ion robotic platform saw a 78% surge in procedures, with international expansion gaining momentum, particularly in Europe, Korea and China. AI-driven lung models and high-precision capabilities will continue to enhance Ion’s global adoption.
The Da Vinci SP system also experienced accelerated growth, with an 81% year-over-year increase, driven by strong demand in Korea, Japan and Europe. New regulatory approvals in the United States for thoracic and colorectal procedures could further drive adoption in 2025.
ISRG Stock Trades Above 50-Day Average
Image Source: Zacks Investment Research
Strategic Investments and Market Penetration
To fuel further expansion, ISRG has planned to directly market its da Vinci products in Italy, Spain, and Portugal at a cost of EUR 290 million, deepening its customer relationships. Manufacturing expansion continues with new facilities in California, Germany and Bulgaria, ensuring scalable production for Da Vinci 5 and Ion systems. Additionally, digital tools, such as the My Intuitive app and VR simulators, should improve surgeon training and optimize procedural outcomes.
Estimates Movement Over 60 Days
Image Source: Zacks Investment Research
Competitive Challenges and Market Headwinds
Despite its market dominance, ISRG faces rising competition from Johnson & Johnson (JNJ - Free Report) and Medtronic (MDT - Free Report) , both investing heavily in robotic surgery. Chinese manufacturers are also offering competitive alternatives, intensifying pricing pressures in the region. Capital constraints in Europe and delays in Japan could slow hospital adoption of ISRG’s robotic platforms. Moreover, geopolitical risks, including tensions in China, the Russia-Ukraine conflict, and Indo-Pacific instability, may pose headwinds to global expansion.
Intuitive Surgicalalso faces increasing competition from international robotic surgery companies, particularly in China, where local firms are introducing competitive systems. Additionally, ISRG is contending with capital constraints in Europe and pressures in the U.S. bariatric segment that may affect its procedure growth.
To address these challenges, ISRG is working on expanding its regulatory reach and emphasizing the unique value propositions of its product portfolio. However, retaining its dominant position may call for continued innovation, cost management and an ability to navigate complex international regulatory environments.
Rising geopolitical tension, along with war raging in Middle Eastern countries and the continued Russia-Ukraine war, is leading to uncertainty. Apart from these, China and India are having border disputes. Moreover, the fall of the government in Bangladesh is raising chaos in the Indo-Pacific region. Any escalation of these situations can hurt economic progress globally, affecting ISRG’s top and bottom-line performances.
ISRG’s P/E F12M Higher Than Industry
Image Source: Zacks Investment Research
Wrapping Up
Looking forward, ISRG projects 13-16% procedural growth in 2025, balancing expansion opportunities with market challenges. China’s competitive landscape remains uncertain but could see recovery if market conditions stabilize. Hospital capital spending constraints in Europe may affect adoption rates, while bariatric procedure trends will be closely monitored as new weight-loss solutions gain traction.
Additionally, gross profit margins are expected to moderate to 67-68% in 2025, impacted by increased depreciation expenses from new facility investments, a shift toward lower-margin products, such as the Da Vinci 5, Ion and SP systems, and stronger U.S. dollar effects on international revenue streams.
ISRG currently carries a Zacks Rank #3 (Hold). Moreover, the style scores don’t look quite promising. The company has a Value score of D and a Growth score of C. The valuation chart also shows the significant premium for ISRG stock compared to the industry. The valuation is also near its 5-year high and a move toward the mean may start as evident historically, taking stock price down. However, the timeline remains uncertain.
As such, we believe that investors may continue to hold the stock now but we caution against any new position. ISRG’s shares reached $616 on Jan. 23 and have been trading below the $600-level since then. The recent high in the stock price is likely to act as a strong resistance in the upcoming period.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.