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Buy UnitedHealth or Intuitive Surgical Stock After Strong Q1 Results?
UnitedHealth Group (UNH - Free Report) ) and Intuitive Surgical (ISRG - Free Report) ) are standing out in this week’s earnings lineup after exceeding their Q1 expectations on Tuesday and providing positive guidance.
As two respective leaders in the medical sector, UnitedHealth and Intuitive Surgical's stock have spiked more than 7% since their strong Q1 reports, joining the market’s rebound as investors look past geopolitical tensions in the Middle East.
What may also pique investors' interest is that their rallies could be sustainable even if a potential economic downturn is induced by higher energy prices in correlation with the US-Iran conflict, considering healthcare is always essential.
UNH’s Strong Operational Recovery
Reflecting strong operational recovery after a difficult 2025, UnitedHealth’s Q1 sales were up more than 2% year over year to $111.72 billion, beating estimates of $109.45 billion by 2% as well.
Optimism for UnitedHealth’s turnaround has been brewing after the Centers for Medicare & Medicaid Services (CMS) finalized a much larger-than-expected increase in Medicare Advantage payment rates for 2027.
UnitedHealth also showcased reassuring margin improvements as medical utilization normalized, with Q1 EPS of $7.23, crushing expectations of $6.46 by nearly 12% and rising from $7.20 per share a year ago.
Other highlights included UnitedHealth’s medical cost ratio falling to 83.9%, a sharp improvement from the elevated levels the health insurer experienced last year, and serving as a key indicator of regained cost control.
Furthermore, UnitedHealth’s operating cash flow came in at roughly $9 billion, up nearly $3.5 billion YoY as updated pricing across its various business lines served as a further catalyst and helped to offset prior cost pressures.
Notably, UNH has now exceeded the Zacks EPS Consensus in three of its last four quarterly reports, posting an average earnings surprise of 0.84%.
Image Source: Zacks Investment Research
ISRG’s Stronger Procedure Volumes & System Placements
Intuitive Surgical's stellar Q1 results were driven by higher procedure volumes and recurring revenue from instruments and accessories, which typically account for more than 70% of the company’s sales, a strong sign of stability.
Intuitive Surgical’s Q1 sales spiked 23% to $2.77 billion from $2.25 billion in the prior year quarter and comfortably exceeded estimates of $2.6 billion. This came as Da Vinci procedure volumes increased 17% YoY, with the growth attributed to a broad expansion across general surgery, bariatrics, urology, and international market adoption.
Even better, Q1 EPS soared 38% to $2.50 versus $1.81 in the comparative quarter, and crushed expectations of $2.08 by 20%. Intuitive Surgical’s gross margins improved due to scale, favorable product mix, and operational efficiencies, with it noteworthy that the company’s operating income grew faster than revenue, a very pleasant sign of superior operating leverage.
ISRG has exceeded the Zacks EPS Consensus for an impressive 13 consecutive quarters, with an average earnings surprise of 16.82% over the last four quarters.
Image Source: Zacks Investment Research
UNH & ISRG’s Raised Guidance
Signaling confidence in its continued operational recovery, UnitedHealth now expects FY26 EPS to be at least $18.25, up from its prior guidance of at least $17.75 and above the current Zacks Consensus of $17.70 or 8% growth.
As for Intuitive Surgical, it updated two key components of its 2026 outlook, including its Da Vinci procedure growth guidance and Non-GAAP gross profit margin. Intuitive Surgical now expects 13.5%-15.5% procedure growth for 2026, up from its prior outlook of 13%-15%, with management increasing its expected non-GAAP gross profit margin range to 67.5%-68.5% from a range of 66%-67%.
Summary & Strategic Thoughts
UnitedHealth’s turnaround efforts are gaining traction, especially as it relates to cost management and operational stabilization. Meanwhile, Intuitive Surgical continues to benefit from long-term global adoption of robotic-assisted surgery.
For now, both stocks land a Zacks Rank #3 (Hold), but buy ratings could be on the way as earnings estimate revisions are likely to trend higher following their strong Q1 results and positive guidance. While UnitedHealth is the more attractive option for value and income-focused investors, Intuitive Surgical has remained a top pick among the medical sector in terms of growth.
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Buy UnitedHealth or Intuitive Surgical Stock After Strong Q1 Results?
UnitedHealth Group (UNH - Free Report) ) and Intuitive Surgical (ISRG - Free Report) ) are standing out in this week’s earnings lineup after exceeding their Q1 expectations on Tuesday and providing positive guidance.
As two respective leaders in the medical sector, UnitedHealth and Intuitive Surgical's stock have spiked more than 7% since their strong Q1 reports, joining the market’s rebound as investors look past geopolitical tensions in the Middle East.
What may also pique investors' interest is that their rallies could be sustainable even if a potential economic downturn is induced by higher energy prices in correlation with the US-Iran conflict, considering healthcare is always essential.
UNH’s Strong Operational Recovery
Reflecting strong operational recovery after a difficult 2025, UnitedHealth’s Q1 sales were up more than 2% year over year to $111.72 billion, beating estimates of $109.45 billion by 2% as well.
Optimism for UnitedHealth’s turnaround has been brewing after the Centers for Medicare & Medicaid Services (CMS) finalized a much larger-than-expected increase in Medicare Advantage payment rates for 2027.
UnitedHealth also showcased reassuring margin improvements as medical utilization normalized, with Q1 EPS of $7.23, crushing expectations of $6.46 by nearly 12% and rising from $7.20 per share a year ago.
Other highlights included UnitedHealth’s medical cost ratio falling to 83.9%, a sharp improvement from the elevated levels the health insurer experienced last year, and serving as a key indicator of regained cost control.
Furthermore, UnitedHealth’s operating cash flow came in at roughly $9 billion, up nearly $3.5 billion YoY as updated pricing across its various business lines served as a further catalyst and helped to offset prior cost pressures.
Notably, UNH has now exceeded the Zacks EPS Consensus in three of its last four quarterly reports, posting an average earnings surprise of 0.84%.
Image Source: Zacks Investment Research
ISRG’s Stronger Procedure Volumes & System Placements
Intuitive Surgical's stellar Q1 results were driven by higher procedure volumes and recurring revenue from instruments and accessories, which typically account for more than 70% of the company’s sales, a strong sign of stability.
Intuitive Surgical’s Q1 sales spiked 23% to $2.77 billion from $2.25 billion in the prior year quarter and comfortably exceeded estimates of $2.6 billion. This came as Da Vinci procedure volumes increased 17% YoY, with the growth attributed to a broad expansion across general surgery, bariatrics, urology, and international market adoption.
Even better, Q1 EPS soared 38% to $2.50 versus $1.81 in the comparative quarter, and crushed expectations of $2.08 by 20%. Intuitive Surgical’s gross margins improved due to scale, favorable product mix, and operational efficiencies, with it noteworthy that the company’s operating income grew faster than revenue, a very pleasant sign of superior operating leverage.
ISRG has exceeded the Zacks EPS Consensus for an impressive 13 consecutive quarters, with an average earnings surprise of 16.82% over the last four quarters.
Image Source: Zacks Investment Research
UNH & ISRG’s Raised Guidance
Signaling confidence in its continued operational recovery, UnitedHealth now expects FY26 EPS to be at least $18.25, up from its prior guidance of at least $17.75 and above the current Zacks Consensus of $17.70 or 8% growth.
As for Intuitive Surgical, it updated two key components of its 2026 outlook, including its Da Vinci procedure growth guidance and Non-GAAP gross profit margin. Intuitive Surgical now expects 13.5%-15.5% procedure growth for 2026, up from its prior outlook of 13%-15%, with management increasing its expected non-GAAP gross profit margin range to 67.5%-68.5% from a range of 66%-67%.
Summary & Strategic Thoughts
UnitedHealth’s turnaround efforts are gaining traction, especially as it relates to cost management and operational stabilization. Meanwhile, Intuitive Surgical continues to benefit from long-term global adoption of robotic-assisted surgery.
For now, both stocks land a Zacks Rank #3 (Hold), but buy ratings could be on the way as earnings estimate revisions are likely to trend higher following their strong Q1 results and positive guidance. While UnitedHealth is the more attractive option for value and income-focused investors, Intuitive Surgical has remained a top pick among the medical sector in terms of growth.