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Yahoo
15 hours ago
- Business
- Yahoo
One Buy-Rated Stock With an Unbreakable Moat That You Can't Ignore
Intuitive Surgical (ISRG), valued at $177 billion, is a medical technology company best known for its da Vinci Surgical System. It has long held a monopoly on the robotic surgery market with the da Vinci systems, a robotic platform that helps surgeons perform minimally invasive surgeries. Its success is based on a two-decade-old ecosystem of surgeon loyalty, hospital dependency, and technological supremacy. During the same period, the stock returned more than 6,330%. With advancements in artificial intelligence (AI), Intuitive can now further develop its system, solidifying its unbreakable moat. Let us see if the stock is currently a buy. More News from Barchart Warren Buffett Warns Inflation Turns Business Into 'The Upside-Down World of Alice in Wonderland' But Weeds Out 'Bad Businesses' Why GOOGL Stock May Be the Market's Next Big Winner Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! A Unique and Strong Business Model Intuitive's da Vinci system is an advanced robotic system that allows surgeons to operate through small incisions using robotic arms and a 3D high-definition camera, giving them greater precision, control, and vision. These minimally invasive surgeries result in fewer complications, shorter hospital stays, and faster recovery times. Intuitive's business model includes not only selling these systems but also earning recurring revenue from sales of system-related instruments and accessories, as well as surgeon training programs. In the most recent second quarter, global da Vinci procedures increased 17% year over year. The company installed 395 da Vinci systems in Q2, including 180 da Vinci 5 systems, its fifth-generation robotic system, which the company launched in 2024. Total revenue increased by 21% to $2.44 billion, with adjusted earnings up 23% to $2.19 per share. Despite an increase in the average selling price (ASP) of da Vinci systems from $1.44 million to $1.5 million, systems revenue increased by 28% due to increased placements and demand for the company's latest da Vinci platforms. This reveals that hospitals are prioritizing investments in Intuitive's cutting-edge surgical platforms, despite broader capital expenditure constraints in some global markets. Additionally, instruments and accessories revenue also rose by 18% YoY to $1.47 billion. One standout performer in the quarter was the SP (Single Port) platform, which grew procedures by 88% year on year. It is used in confined anatomical spaces and complex cases such as colorectal or head and neck surgeries, where traditional multiport robotic systems may fail to function. In the second quarter, Intuitive placed 23 SP systems. Additionally, the Ion system, Intuitive's robotic-assisted platform for minimally invasive lung biopsies, saw a 52% increase in procedures to 35,000, with an installed base of 905 systems. Despite macroeconomic uncertainty and rising trade tensions, gross margins remained at 67.9%. The company repurchased $181 million worth of shares and spent $155 million in capex, yet grew its cash reserves to $9.5 billion. Looking ahead, the company intends to launch da Vinci 5 globally. Intuitive is well-positioned to execute, with a healthy balance sheet, recurring revenue model, and strong free cash flow. The Unbreakable Moat Intuitive has a two-decade headstart in the field of robotic surgery. According to GlobalData, Intuitive held 60% of the global robotic surgery market in 2024. This market, which was valued at $2.9 billion in 2024, is expected to reach $9.2 billion by 2034. Intuitive has installed over 11,000 da Vinci systems across 74 countries. Bringing a robotic system to market requires years of research and development, surgeon partnerships, billions of dollars, and regulatory hurdles. Even if a new entrant or an established player attempts to enter this space, they must show clinical efficacy, safety, and training scalability at a level that matches Intuitive. Rivals with deep pockets have developed alternatives. Notably, Medtronic (MDT) with its Hugo system, Johnson & Johnson (JNJ) with its Ottava surgical system, and Stryker (SYK) with its Mako system have all attempted but failed to gain market share. This is due in part to hospitals and surgeons being locked into the da Vinci ecosystem, where they have invested a significant amount of money to purchase these systems and train their surgeons. Once trained, switching platforms is costly and risky. That's what makes the moat so unbreakable. Besides the da Vinci, Intuitive has expanded its reach into pulmonology, colorectal, thoracic, and head-and-neck surgeries with Ion, SP, and staplers, creating a diversified model. Overall, Intuitive is a growth stock with decades of innovation, operational excellence, and a moat based on technological superiority and clinical outcomes that competitors will find difficult to replicate. Is ISRG Stock a Buy, Hold, or Sell on Wall Street? On Wall Street, overall, Intuitive stock is a 'Moderate Buy.' Out of the 28 analysts that cover the stock, 18 rate it a 'Strong Buy,' two suggest a 'Moderate Buy,' seven rate it a 'Hold,' and one says it is a 'Strong Sell.' The average target price of $602.96 is 21% above current levels. The high price estimate of $675 implies 36% upside over the next 12 months. Despite its unbreakable moat and excellent long-term growth prospects in the robotic surgery market, ISRG stock is currently trading at a premium of 60x forward earnings. Risk-averse investors can start accumulating shares around the $400 level to invest with a margin of safety. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Where Will Intuitive Surgical Be in 5 Years?
Key Points Sector rotation and a hot valuation are weighing on shares of Intuitive Surgical. The company still has a healthy growth runway ahead with its core da Vinci system. However, it's important to avoid overpaying for even the best of companies. 10 stocks we like better than Intuitive Surgical › Intuitive Surgical (NASDAQ: ISRG) is one of the best success stories you'll find in the healthcare sector. The company has helped patients worldwide as a pioneer in robotic-assisted surgery, and its business success has driven the stock to returns of over 25,000% since its initial public offering (IPO) in 2000. The company's flagship da Vinci system remains its crown jewel today and continues to drive profitable growth from an increasingly larger installed base. Yet the stock has wavered recently, currently sitting in the middle of its 52-week range. Is this a dip worth buying for the next five years, or is Intuitive Surgical losing its edge? Here is where the stock may go over the coming years. A hefty valuation could be weighing on the share price Intuitive Surgical currently trades at a price-to-earnings (P/E) ratio of 75. Meanwhile, analysts estimate the company will grow earnings by an average of just over 13.8% annually over the long term. The company has a sterling reputation for its long track record of business and investment performance; however, it's challenging to justify such a high valuation for the growth Wall Street anticipates. At the same time, the broader S&P 500 healthcare sector is trading near the low end of its 52-week range, which suggests that healthcare stocks aren't particularly popular at the moment. Although the broader stock market is near all-time highs, individual stocks, entire industries, or market sectors may be hot or cold at any given time. Sometimes, the simple explanation is the correct one. Market sentiment is working against the healthcare sector, so Intuitive Surgical's expensive valuation appears to be weighing on the stock. It happens. Intuitive Surgical still has more growth ahead That said, market dynamics can and will change over time, and five years is a considerable amount of time. Top-line and bottom-line growth tend to drive a stock's long-term performance, so it's essential to understand where a company stands in its business journey. Intuitive Surgical currently sells two systems: its da Vinci system, available in single- and multi-port configurations, used for a variety of soft tissue procedures, and the Ion, the company's newer system, used for performing minimally invasive peripheral lung biopsies. As of June 30, there are 10,488 da Vinci systems installed worldwide, generating recurring revenue for Intuitive Surgical as these systems consume supplies and require servicing over time. The global da Vinci installed base performed 17% more procedures in Q2 than the prior year, indicating that growth remains relatively healthy (no pun intended). The company estimates its core (da Vinci) addressable market at approximately 8 million annual soft tissue procedures, based on the da Vinci systems' current regulatory approvals and capabilities. Considering da Vinci systems will perform over 3 million procedures this year, it seems that Intuitive Surgical still has room for solid short- and medium-term growth, and that's speaking to organic growth, as in more installed systems and procedures. As a bonus, Intuitive Surgical has zero debt, is highly profitable, and has $4.5 billion in cash. Management could lean more into share repurchases to help grow its earnings per share. Given all of this, the 13% annualized growth rate Wall Street anticipates seems achievable. Where might the stock price be in five years? Investors can extrapolate this growth rate to see where the stock may trade over time. Applying that 13.8% growth rate to Intuitive Surgical's trailing-12-month earnings per share of $6.82, the company's earnings would grow something like this: 2026: $7.76 2027: $8.83 2028: $10.05 2029: $11.44 2030: $13.02 The stock has averaged a P/E ratio of 62 over the past 10 years, so here is where the stock may trade in five years, based on its current valuation and some other scenarios: Price-to-Earnings Ratio July 2030 Share Price Total Upside or Downside 75 $976 91% 65 $846 66% 55 $716 40% 45 $586 15% 35 $456 (11%) Calculations by author. If Intuitive Surgical reverts closer to its long-term averages, the current valuation could easily continue to weigh on the stock. Therefore, investors may want to err on the side of caution and focus on the lower valuations. If the broader market stumbles, Intuitive Surgical could even drop to a P/E ratio below its long-term norms. It's always good to build a margin of safety into these exercises. Intuitive Surgical hasn't lost its edge, but it is an overvalued stock. Investors may want to prepare for a five-year period in which the stock delivers underwhelming returns, in case Intuitive Surgical's valuation returns to a more appropriate level for its expected growth. Should you invest $1,000 in Intuitive Surgical right now? Before you buy stock in Intuitive Surgical, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intuitive Surgical wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,942!* Now, it's worth noting Stock Advisor's total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool has a disclosure policy. Where Will Intuitive Surgical Be in 5 Years? was originally published by The Motley Fool
Yahoo
22-07-2025
- Business
- Yahoo
Intuitive Surgical reports upbeat quarterly earnings on strong demand for surgical robots
(Reuters) -Intuitive Surgical beat Wall Street estimates for second-quarter profit and revenue on Tuesday, driven by growing demand for its surgical robots used in minimally invasive procedures. A steady rise in demand for elective surgeries has contributed to higher procedure volumes for medical device makers such as Intuitive Surgical in recent quarters. The company, known for its da Vinci robotic systems, has seen consistent growth as hospitals work through a backlog of deferred procedures and expand access to minimally invasive care. The medical device maker slightly raised its adjusted gross profit margin forecast for 2025 to between 66% and 67% of revenue, up from earlier estimates of 65% to 66.5%. The updated range includes an estimated impact from tariffs of 1% of revenue, plus or minus 20 basis points, Intuitive said, compared to previously estimated impact of 1.7% of revenue, plus or minus 30 basis points. Shares of the Sunnyvale, California-based company fell 1.5% in after-hours trading. More than 80% of the instruments and accessories for the company's da Vinci system are produced at Intuitive's facility in Mexico, while the company also operates in China and other international markets. Intuitive's worldwide da Vinci procedure volumes rose about 17% compared to the same quarter last year. The company expects global da Vinci-assisted procedures to increase by about 15.5% to 17% in 2025, up from its prior forecast of 15% to 17%. On an adjusted basis, the medical device maker earned $2.19 per share for the quarter ended June 30, beating analysts' estimates of $1.92 per share, according to LSEG data. The company reported revenue of $2.44 billion for the second quarter, compared to analysts' estimates of $2.35 billion. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-07-2025
- Business
- Yahoo
Intuitive Surgical reports upbeat quarterly earnings on strong demand for surgical robots
(Reuters) -Intuitive Surgical beat Wall Street estimates for second-quarter profit and revenue on Tuesday, driven by growing demand for its surgical robots used in minimally invasive procedures. A steady rise in demand for elective surgeries has contributed to higher procedure volumes for medical device makers such as Intuitive Surgical in recent quarters. The company, known for its da Vinci robotic systems, has seen consistent growth as hospitals work through a backlog of deferred procedures and expand access to minimally invasive care. The medical device maker slightly raised its adjusted gross profit margin forecast for 2025 to between 66% and 67% of revenue, up from earlier estimates of 65% to 66.5%. The updated range includes an estimated impact from tariffs of 1% of revenue, plus or minus 20 basis points, Intuitive said, compared to previously estimated impact of 1.7% of revenue, plus or minus 30 basis points. Shares of the Sunnyvale, California-based company fell 1.5% in after-hours trading. More than 80% of the instruments and accessories for the company's da Vinci system are produced at Intuitive's facility in Mexico, while the company also operates in China and other international markets. Intuitive's worldwide da Vinci procedure volumes rose about 17% compared to the same quarter last year. The company expects global da Vinci-assisted procedures to increase by about 15.5% to 17% in 2025, up from its prior forecast of 15% to 17%. On an adjusted basis, the medical device maker earned $2.19 per share for the quarter ended June 30, beating analysts' estimates of $1.92 per share, according to LSEG data. The company reported revenue of $2.44 billion for the second quarter, compared to analysts' estimates of $2.35 billion. Sign in to access your portfolio
Reuters
22-07-2025
- Business
- Reuters
Intuitive Surgical reports upbeat quarterly earnings on strong demand for surgical robots
July 22 (Reuters) - Intuitive Surgical (ISRG.O), opens new tab beat Wall Street estimates for second-quarter profit and revenue on Tuesday, driven by growing demand for its surgical robots used in minimally invasive procedures. A steady rise in demand for elective surgeries has contributed to higher procedure volumes for medical device makers such as Intuitive Surgical in recent quarters. The company, known for its da Vinci robotic systems, has seen consistent growth as hospitals work through a backlog of deferred procedures and expand access to minimally invasive care. The medical device maker slightly raised its adjusted gross profit margin forecast for 2025 to between 66% and 67% of revenue, up from earlier estimates of 65% to 66.5%. The updated range includes an estimated impact from tariffs of 1% of revenue, plus or minus 20 basis points, Intuitive said, compared to previously estimated impact of 1.7% of revenue, plus or minus 30 basis points. Shares of the Sunnyvale, California-based company fell 1.5% in after-hours trading. More than 80% of the instruments and accessories for the company's da Vinci system are produced at Intuitive's facility in Mexico, while the company also operates in China and other international markets. Intuitive's worldwide da Vinci procedure volumes rose about 17% compared to the same quarter last year. The company expects global da Vinci-assisted procedures to increase by about 15.5% to 17% in 2025, up from its prior forecast of 15% to 17%. On an adjusted basis, the medical device maker earned $2.19 per share for the quarter ended June 30, beating analysts' estimates of $1.92 per share, according to LSEG data. The company reported revenue of $2.44 billion for the second quarter, compared to analysts' estimates of $2.35 billion.
