Analysts Remain Bullish On Intuitive Surgical Despite Macro Uncertainty
Intuitive Surgical Inc (NASDAQ:ISRG) reported first-quarter 2025 revenue of $2.25 billion, beating analyst estimates of $2.19 billion.
Total revenue was up 19% year-over-year as Worldwide da Vinci procedures increased by approximately 17%. The company placed 367 da Vinci surgical systems in the quarter, compared to 313 in the same quarter of the prior year. Intuitive Surgical’s da Vinci surgical system installed base grew to 10,189 systems as of March 31, up 15% year-over-year.
The company reported first-quarter adjusted earnings of $1.81 per share, beating analyst estimates of $1.72 per share.
Guidance: Intuitive Surgical expects the full-year 2025 worldwide da Vinci procedures to increase by approximately 15%-17%.
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The company expects a gross profit margin of 65% to 66.5% in 2025, which includes an estimated 1.7% impact from tariffs.
Truist Securities cut the price target from $605 to $590 on Tuesday, while maintaining a Buy rating, due to a lower 2026 estimated EPS, which reflects the incremental tariff impact — and likely leaves room for upside for the robotic-assisted surgery company.
Analyst Richard Newitter writes, “We think the stock deserves a premium multiple given elevated procedure growth and a new product cycle now in-hand which has potential to drive significant rev and EPS growth acceleration and upside vs. our/CNS thinking into the out-years. Although tariffs remain a NT headwind, it’s a manageable one in our view that we think investors will gradually begin to look through given ISRG is a leading innovator…”
William Blair analyst Brandon Vazquez wrote on Wednesday, “On macro dynamics, uncertainty around Medicaid, and subsequently capex budgets, will admittedly linger on the stock for the time being.”
William Blair notes that the management said U.S. capital spending hasn’t slowed down much yet, but international markets are starting to feel pressure as more money gets shifted toward defense.
Intuitive’s leasing model is helping hospitals manage tight budgets. Still, investors are keeping a close eye on the situation—especially with possible Medicaid cuts that could tighten hospital finances. While it’s hard to predict if those cuts will happen due to the current political climate, they could have a huge impact, as around 16% of U.S. adults rely on Medicaid.
Stifel analyst on Tuesday wrote, “Our procedure growth focus reminds us that system placements drive future procedures, top-line growth, and future margin expansion…and this 1Q25 procedure growth was an encouraging start to the year. While ISRG was pressured in after-hours trading, we expect investors will find a lot to like as they review further Intuitive’s 1Q25 results and key performance metrics.”
Analyst Rick Wise says the $9.1 billion cash position and zero debt offer excellent balance sheet flexibility and the opportunity to buy back shares. Stifel maintains a price target of $670 with a Buy rating.
Price Action: ISRG stock is up 2.47% to $490.58 at last check on Wednesday.
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