Intuitive Surgical (ISRG) stock skidded late Thursday despite beating profit expectations following a strong sales preannouncement that sent shares on a five-day sprint.
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During the December quarter, the robotic surgery giant earned an adjusted $2.21 per share, easily beat forecasts for $1.79 a share, according to FactSet. The rest of Intuitive Surgical’s report lined up with the preannouncement on Jan. 15 that sent Intuitive Surgical stock flying 7.7%.
But in after-hours trades on today’s stock market, shares fell nearly 2% to 597.07. Intuitive Surgical stock hit an intraday record high at 616 on Thursday and pulled back to close at 608.66.
The company generated $2.41 billion in sales, above calls for $2.25 billion. Sales grew 25% vs. the year-earlier period, benefiting richly from 493 new system placements. That beat expectations by 19% and contributed to two-thirds of sales beat, Evercore ISI analyst Vijay Kumar said in a recent client note. Of those, 174 were new da Vinci 5 systems.
Notably, the number of procedures performed using Intuitive Surgical’s robotic surgery systems climbed 18%. Procedure volume is a key metric. When the number of procedures rise, so too do sales of single-use instruments and accessories.
To that end, sales of those tools ran up 23% to $1.41 billion in the fourth quarter, topping estimates for $1.37 billion.
Intuitive Surgical Stock Earnings: Outlook Appears Conservative
Intuitive Surgical kept the outlook it issued on Jan. 15 for 13% to 16% procedure growth in 2025, which lags 17% growth in 2024. But the company is known for being conservative in its guidance. Analysts currently project 17.1% procedure growth for the year.
“Our initial read on guidance and 2024 results suggests that Intuitive has an achievable pathway to deliver upside to these estimates,” William Blair analyst Brandon Vazquez said in a report. “Specifically, even the high end of this guidance range suggests system utilization slightly below 2024 levels, and we believe the ramping-up launch of da Vinci 5 plus new software launches in 2025 can act as a tailwind to procedure growth.”
Intuitive Surgical says it was just 34% penetrated into the robotic surgery market before exiting 2024. The company sees room to more than double its total addressable market to 22 million procedures over time. As of now, Intuitive estimates its market opportunity at 8 million cases a year. That doesn’t include an additional 700,000 procedures, annually, from its lung biopsy robot, Ion.
Vazquez has an outperform rating on Intuitive Surgical stock.
Intuitive shares also have a best-possible Composite Rating of 99. This puts the robotic surgery stock in the top 1% of all stocks in terms of fundamental and technical measures, according to IBD Digital.
Follow Allison Gatlin on X/Twitter at @IBD_AGatlin.
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