Back to top

Image: Shutterstock

Is a Beat Likely for Intuitive Surgical (ISRG) in Q1 Earnings?

Read MoreHide Full Article

Intuitive Surgical, Inc. (ISRG - Free Report) is scheduled to release first-quarter 2024 results on Apr 18, after the closing bell.

The company’s shares have risen 11.9% year to date compared with the industry’s 4.8% growth. The S&P 500 Index has gained 7.7% in the same time frame.

In the last reported quarter, ISRG delivered an earnings surprise of 8.84%. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 5.83%.

Zacks Investment Research
Image Source: Zacks Investment Research

Q1 Estimates

The Zacks Consensus Estimate for ISRG’s revenues is currently pegged at $1.86 billion, indicating a 9.9% improvement from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at $1.40 per share, indicating a 13.8% year-over-year increase.

Factors to Note

The Instruments & Accessories segment is likely to report robust first-quarter results on the back of rising da Vinci procedure volume as seen in the past few quarters. However, an unfavorable currency movement is expected to have partially offset the gains from recovering demand in procedures. Meanwhile, a rise in the proportion of recurring revenues buoys well for ISRG.

Moreover, the recovery in China on the back of strong procedure growth following COVID-related setbacks in the past year is likely to have boosted sales in the soon-to-be-reported quarter.

ISRG reported sales of $1.93 billion in the fourth quarter, indicating a 17% year-over-year increase. Per management, da Vinci procedures grew approximately 21% worldwide in the to-be-reported quarter. The company recorded fourth-quarter sales of $1.14 billion from instruments and accessories, implying year-over-year growth of 21.6%.

However, Intuitive Surgical’s da Vinci capital placements are likely to have been on the lower side due to continued supply-chain challenges adversely impacting the availability of semiconductor components and growing capital spending pressure on hospitals amid rising inflationary pressure.

The FDA’s approval for the use of its next-generation da Vinci 5 robotic system in March is unlikely to have a material impact on the first-quarter results. However, the company may provide an update on its launch plans.

During the fourth quarter, the company placed 415 systems, implying year-over-year growth of 12%. Intuitive Surgical’s da Vinci capital placements are likely to have benefited during the soon-to-be-reported quarter from rising demand outside the country. The company placed 196 systems in the fourth quarter compared with 188 in the prior-year quarter in ex-U.S. markets.

The single port platform’s growth is expected to have been driven by additional clinical indications and clearances in markets beyond the United States and Korea. System revenues increased 15.6% to $480.2 million during the fourth quarter.

During the second quarter of 2023, Intuitive Surgical launched its Ion, beginning with the United Kingdom. The availability of Ion catheters in Europe is likely to have brought additional revenues during the first quarter.

The company may also provide a view on the uptake in the region. ISRG’s digital products, like the Intuitive Hub and the recently launched Case Insights, are likely to have shown rising adoption.

However, government policy changes in China, higher logistics costs amid supply-chain challenges and rising inflationary pressure are likely to have hurt sales and increased expenses in the to-be-reported quarter.

Earnings Beat Likely

Our proven model predicts an earnings beat for Stryker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: ISRG has an Earnings ESP of +6.50% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Intuitive Surgical, Inc. Price and EPS Surprise

Intuitive Surgical, Inc. Price and EPS Surprise

Intuitive Surgical, Inc. price-eps-surprise | Intuitive Surgical, Inc. Quote

Other Stocks Worth a Look

Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this reporting cycle.

Edwards Lifesciences (EW - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company’s shares have surged 16.9% year to date. EW’s earnings met estimates in the last reported quarter. Edwards Lifesciences has a four-quarter average earnings surprise of 0.80%.

SiBone (SIBN - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank of 3 at present.

Its shares have lost 27.3% year to date. SIBN’s earnings beat estimates in the last reported quarter. SiBone has a trailing four-quarter average earnings surprise of 19.98%.

Masimo (MASI - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank of 3 at present.

The stock has risen 17.8% year to date. MASI’s earnings beat estimates in the last reported quarter. Masimo has a four-quarter average earnings surprise of 3.82%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in