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ISRG Stock Before Q2 Earnings Release: To Buy or Not to Buy?
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Key Takeaways
ISRG is projected to report Q2 revenue of $2.35B and EPS of $1.92, with 15-17% procedure growth in 2025.
Strong da Vinci 5 placements and Ion adoption likely drove ISRG's Q2, but bariatric weakness may offset gains.
Tariff risks, elevated valuation, and global CapEx strain could limit ISRG upside despite solid fundamentals.
Intuitive Surgical, Inc. (ISRG - Free Report) is set to report second-quarter 2025 earnings on April 22. The Zacks Consensus Estimate for sales and earnings is pegged at $2.35 billion and $1.92 per share, respectively. Earnings per share estimates for ISRG have remained stable at $7.84 and $9.05 for 2025 and 2026, respectively, over the past 30 days. The company expects worldwide da Vinci procedures to increase approximately 15-17% in 2025, a trend that should have benefited the top line in the to-be-reported quarter.
Intuitive Surgical’s close peers, Thermo Fisher Scientific (TMO - Free Report) and Medtronic (MDT - Free Report) , are slated to announce their quarterly numbers in the upcoming few weeks. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
Estimate Movement
In the last reported quarter, ISRG delivered an earnings surprise of 5.85%. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 14.64%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Intuitive Surgical 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. This is not the case here, as you will see below.
The Instruments & Accessories segment is likely to report robust second-quarter results on the back of several favorable factors, especially strong da Vinci procedure growth. Procedure volume is likely to have been driven by growth in U.S. general surgery and cancer procedures in ex-U.S. markets.
General surgery procedures have aided procedure growth in the U.S. market, while cancer procedures benefited ex-U.S. markets during the past two quarters. We expect this trend to have continued in the second quarter. Procedures with the Ion platform are also likely to have exhibited robust growth. However, declining demand for bariatric procedures, especially in the United States, might have partially offset the positives.
Moreover, procedure growth in China improved from the prior quarter and was a little above the global average, driven primarily by urologic procedures. This trend is likely to have continued and boosted sales in the soon-to-be-reported quarter. However, tariff-related challenges are likely to have impacted sales in the country. Apart from China, rising adoption in Japan and India might have aided sales growth.
The Systems segment’s results are expected to reflect strong adoption of the newly launched da Vinci 5. The company’s second-quarter top line is likely to have grown on the back of strong adoption of the recently launched da Vinci 5 surgical system. The company placed 147 da Vinci 5 systems during the first quarter. A similar trend is likely to have continued in the second quarter. Moreover, the first quarter reflected a higher average selling price for da Vinci 5, a trend that should have further boosted sales in the soon-to-be-reported quarter. However, the company is gearing up for a broader launch of da Vinci 5 in the second half of 2025, which should have driven expenses higher.
The Services segment’s quarterly results are expected to reflect strong adoption of ISRG’s digital products and services, including Intuitive App and Intuitive Hub.
Meanwhile, ISRG’s margins are likely to have been hurt due to the launch of new da Vinci and Ion systems as well as higher depreciation related to new facilities. However, cost reductions and fixed overhead leverage might have partially offset the margin decline.
Meanwhile, analysts will be asking questions on the potential impact of U.S. tariffs on China and vice versa in the upcoming quarters of 2025. The rising trade war between the world’s top two economies might have hit supply chains, potentially leading to a rise in costs as well as hurting top-line growth.
Price Performance & Valuation
Intuitive Surgical’s shares have declined 0.7% so far this year compared with the industry’s 11.5% decline. The company’s shares have underperformed the S&P 500 Index’s gain of 6.5% but outperformed the Zacks Medical sector’s decrease of 6.4%.
ISRG has also outperformed Thermo Fisher Scientific’s 20.3% decline but underperformed Medtronics’ 12.2% gain so far this year.
YTD Price Performance
Image Source: Zacks Investment Research
Now, let us take a look at the value Intuitive Surgical offers to its investors at current levels.
Currently, ISRG is trading at a premium compared to its industry, with a forward 12-month P/E of 60.92X compared with the industry’s 27.90X. However, the current valuation came down from a five-year high of 72.39X but is higher than the five-year low of 41.90X. ISRG has traded at a premium to the industry valuation in the past five years, reflecting the company's higher growth prospects. However, the current Value score of D reflects a high valuation.
ISRG's P/E F12M Graph
Image Source: Zacks Investment Research
Investment Thesis
Although the valuation remains high, Intuitive Surgical is likely to continue its strong performance in the rest of 2025, driven by continued growth in the company’s da Vinci procedure volume and strong Ion procedure growth. Improving procedure prices should aid sales growth going forward. Increasing procedure volume, along with better system placements and services across all markets, should drive top-line growth this year.
The launch of da Vinci SP in Europe and da Vinci 5 in the U.S. market should continue to drive system placements higher. However, weaknesses in bariatric procedures and challenges in China are likely to offset growth in the upcoming quarters.
Meanwhile, rising trade tensions following the imposition of U.S. tariffs are likely to lead to uncertainty across the globe, which may affect ISRG’s performance as well. However, the company’s primary manufacturing facilities in the United States and Mexico should continue to support U.S. revenues in the upcoming quarters without any tariff risks. Meanwhile, a weak dollar can act as a tailwind for top-line growth.
Conclusion
Although Intuitive Surgical has strong fundamental factors supporting its uptrend, we will caution investors against adding the stock to their portfolio before its earnings release. The company carries a favorable Zacks Rank; however, the Style Score of D does not reflect a major strength in the stock. The company’s high valuation may have factored in the strong fundamentals, including growth in procedures and installed base.
While current shareholders may hold their position, new investors should wait for the stock to release its second-quarter results and analyze the new updates before making an entry. However, valuation may continue to remain expensive as ISRG plans to expand its efforts to place systems beyond the United States, increase utilization in existing U.S. accounts and expand into additional indications in the next two years.
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ISRG Stock Before Q2 Earnings Release: To Buy or Not to Buy?
Key Takeaways
Intuitive Surgical, Inc. (ISRG - Free Report) is set to report second-quarter 2025 earnings on April 22. The Zacks Consensus Estimate for sales and earnings is pegged at $2.35 billion and $1.92 per share, respectively. Earnings per share estimates for ISRG have remained stable at $7.84 and $9.05 for 2025 and 2026, respectively, over the past 30 days. The company expects worldwide da Vinci procedures to increase approximately 15-17% in 2025, a trend that should have benefited the top line in the to-be-reported quarter.
Intuitive Surgical’s close peers, Thermo Fisher Scientific (TMO - Free Report) and Medtronic (MDT - Free Report) , are slated to announce their quarterly numbers in the upcoming few weeks. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
Estimate Movement
In the last reported quarter, ISRG delivered an earnings surprise of 5.85%. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 14.64%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Intuitive Surgical 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. This is not the case here, as you will see below.
ISRG has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Note
The Instruments & Accessories segment is likely to report robust second-quarter results on the back of several favorable factors, especially strong da Vinci procedure growth. Procedure volume is likely to have been driven by growth in U.S. general surgery and cancer procedures in ex-U.S. markets.
General surgery procedures have aided procedure growth in the U.S. market, while cancer procedures benefited ex-U.S. markets during the past two quarters. We expect this trend to have continued in the second quarter. Procedures with the Ion platform are also likely to have exhibited robust growth. However, declining demand for bariatric procedures, especially in the United States, might have partially offset the positives.
Moreover, procedure growth in China improved from the prior quarter and was a little above the global average, driven primarily by urologic procedures. This trend is likely to have continued and boosted sales in the soon-to-be-reported quarter. However, tariff-related challenges are likely to have impacted sales in the country. Apart from China, rising adoption in Japan and India might have aided sales growth.
The Systems segment’s results are expected to reflect strong adoption of the newly launched da Vinci 5. The company’s second-quarter top line is likely to have grown on the back of strong adoption of the recently launched da Vinci 5 surgical system. The company placed 147 da Vinci 5 systems during the first quarter. A similar trend is likely to have continued in the second quarter. Moreover, the first quarter reflected a higher average selling price for da Vinci 5, a trend that should have further boosted sales in the soon-to-be-reported quarter. However, the company is gearing up for a broader launch of da Vinci 5 in the second half of 2025, which should have driven expenses higher.
The Services segment’s quarterly results are expected to reflect strong adoption of ISRG’s digital products and services, including Intuitive App and Intuitive Hub.
Meanwhile, ISRG’s margins are likely to have been hurt due to the launch of new da Vinci and Ion systems as well as higher depreciation related to new facilities. However, cost reductions and fixed overhead leverage might have partially offset the margin decline.
Meanwhile, analysts will be asking questions on the potential impact of U.S. tariffs on China and vice versa in the upcoming quarters of 2025. The rising trade war between the world’s top two economies might have hit supply chains, potentially leading to a rise in costs as well as hurting top-line growth.
Price Performance & Valuation
Intuitive Surgical’s shares have declined 0.7% so far this year compared with the industry’s 11.5% decline. The company’s shares have underperformed the S&P 500 Index’s gain of 6.5% but outperformed the Zacks Medical sector’s decrease of 6.4%.
ISRG has also outperformed Thermo Fisher Scientific’s 20.3% decline but underperformed Medtronics’ 12.2% gain so far this year.
YTD Price Performance
Image Source: Zacks Investment Research
Now, let us take a look at the value Intuitive Surgical offers to its investors at current levels.
Currently, ISRG is trading at a premium compared to its industry, with a forward 12-month P/E of 60.92X compared with the industry’s 27.90X. However, the current valuation came down from a five-year high of 72.39X but is higher than the five-year low of 41.90X. ISRG has traded at a premium to the industry valuation in the past five years, reflecting the company's higher growth prospects. However, the current Value score of D reflects a high valuation.
ISRG's P/E F12M Graph
Image Source: Zacks Investment Research
Investment Thesis
Although the valuation remains high, Intuitive Surgical is likely to continue its strong performance in the rest of 2025, driven by continued growth in the company’s da Vinci procedure volume and strong Ion procedure growth. Improving procedure prices should aid sales growth going forward. Increasing procedure volume, along with better system placements and services across all markets, should drive top-line growth this year.
The launch of da Vinci SP in Europe and da Vinci 5 in the U.S. market should continue to drive system placements higher. However, weaknesses in bariatric procedures and challenges in China are likely to offset growth in the upcoming quarters.
Meanwhile, rising trade tensions following the imposition of U.S. tariffs are likely to lead to uncertainty across the globe, which may affect ISRG’s performance as well. However, the company’s primary manufacturing facilities in the United States and Mexico should continue to support U.S. revenues in the upcoming quarters without any tariff risks. Meanwhile, a weak dollar can act as a tailwind for top-line growth.
Conclusion
Although Intuitive Surgical has strong fundamental factors supporting its uptrend, we will caution investors against adding the stock to their portfolio before its earnings release. The company carries a favorable Zacks Rank; however, the Style Score of D does not reflect a major strength in the stock. The company’s high valuation may have factored in the strong fundamentals, including growth in procedures and installed base.
While current shareholders may hold their position, new investors should wait for the stock to release its second-quarter results and analyze the new updates before making an entry. However, valuation may continue to remain expensive as ISRG plans to expand its efforts to place systems beyond the United States, increase utilization in existing U.S. accounts and expand into additional indications in the next two years.