Intuitive Surgical (ISRG) stock surged late Thursday after the robotic surgery behemoth blasted third-quarter earnings expectations out of the water.
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During the September quarter, Intuitive Surgical earned an adjusted $1.84 per share. That walloped forecasts for $1.64 a share and grew 26% year over year. Sales also climbed 17% to $2.04 billion, beating Wall Street’s projection for $2.01 billion, according to FactSet.
Notably, the number of procedures performed using Intuitive Surgical’s bread-and-butter robotic surgery system, da Vinci, popped 18%. Investors pay close attention to this number because when more procedures take place, customers buy more single-use instruments and accessories. Sales of those tools rocketed 18% to $1.26 billion, ahead of calls for $1.24 billion.
In late trades, Intuitive Surgical stock jumped more than 5% to 498.75. Shares are flirting with their 50-day line. Intuitive Surgical stock has risen more than 41% this year.
Intuitive Surgical Stock: da Vinci 5 On Deck
Notably, the company is now two quarters into the soft launch of its next-generation robot, called da Vinci 5. That system is likely to be a big catalyst in 2025, RBC Capital Markets analyst Shagun Singh said in a recent report to clients.
She sees Intuitive Surgical stock as having “quality with catalysts.” The da Vinci 5 will kick off “a multiyear replacement cycle next year,” she added.
“We believe sentiment for Intuitive Surgical continues to be positive heading into the third-quarter earnings season in anticipation of the da Vinci 5 demand buildup into year-end even though the system is in a limited launch currently,” she said.
Procedure Slowdown Was Expected
The important number for Intuitive Surgical stock investors is procedure growth. Wall Street predicted 17.6% procedure growth in the third quarter, and Intuitive Surgical narrowly beat that at 18%. That was relatively in line with 18.1% growth in the June quarter and just below 19% in the year-ago period.
RBC’s Singh notes procedures tend to slow down in the third quarter. But capital purchases — customers buying new or replacement robotic surgery systems — build throughout the year.
“Our latest checks suggest that the appetite for capital is robust, which we believe positions Intuitive Surgical well into year-end,” she said. “The expectations continue to be high, but investor inbounds suggest to us that this winner is one they want to own into year-end, as well as into 2025 as it enters the full launch.”
She has an outperform rating on Intuitive Surgical stock, saying “dips and pauses are always the best time to add” to shares.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin
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