On Friday, RBC Capital Markets reaffirmed its Outperform rating for Intuitive Surgical’s shares and raised its price target from $525.00 to $555.00. This revision comes after Intuitive Surgical’s third-quarter 2024 earnings report, which showed a 2% sales outperformance driven largely by an 18% increase in procedure volumes year-over-year, surpassing the anticipated 16% growth rate.
The firm’s third-quarter results were further strengthened by a higher-than-expected number of system placements, with 379 systems placed compared to the expected 326. The company’s earnings per share (EPS) exceeded forecasts by 12%, which was attributed to effective revenue conversion and strong margins.
In light of these results, Intuitive Surgical’s management has adjusted its full-year guidance, elevating the lower boundary of its procedure volume forecast by 0.5 percentage points to a range of 16.0% to 17.0%. Additionally, the company has lowered its projections for operational expenditure growth by 0.5 percentage points, now anticipating a 10-12% year-over-year increase.
A key aspect from the report highlighted the success of the da Vinci 5 system placements, reaching 110 units, significantly above RBC Capital Markets’ prediction of roughly 80. This outcome is regarded as a positive indicator for the company’s product adoption.
The raised price target reflects RBC Capital Markets’ confidence in Intuitive Surgical’s growth trajectory, bolstered by strong quarterly results and favorable financial guidance adjustments. The firm maintains its Outperform rating, indicating its expectation for the company’s continued strong market performance.
In other recent developments, Intuitive Surgical reported substantial third-quarter results for 2024, marked by an 18% increase in DaVinci procedures and robust system placements. The company’s revenue amounted to $2 billion, representing a 17% increase from the previous year.
The installed base of DaVinci systems expanded to approximately 9,300 multi-port systems globally, with 379 systems placed in the third quarter. Intuitive Surgical also revised its full-year 2024 growth forecast for procedures to a range of 16% to 17%.
Mizuho Securities also recently adjusted its outlook on Intuitive Surgical, raising the price target from $500 to $550 while maintaining a Neutral stance on the stock. This update followed the company’s report of a $36 million and $0.20 earnings beat, driven by an 18% rise in procedure volumes and a significant increase in Da Vinci 5 system placements.
Despite ongoing pricing challenges in China due to value-based pricing adjustments and the emergence of domestic competitors, Intuitive Surgical anticipates a broad launch of DaVinci 5 by mid-2025 and is focusing on expanding the Ion system internationally, especially in China and Europe.
Intuitive Surgical’s strong performance is supported by real-time data from InvestingPro. The company’s market capitalization stands at $168.4 billion, reflecting its prominent role in the medical technology sector. Intuitive Surgical has demonstrated significant revenue growth, with a 14.47% increase in quarterly revenue as of Q2 2024, corroborating the article’s mention of the company’s sales outperformance.
InvestingPro’s analysis indicates that Intuitive Surgical is trading near its 52-week high and has exhibited a high return over the past year, with a 71.94% one-year price total return. These figures highlight the market’s positive reception of the company’s performance, particularly its strong procedure volume growth and system placements.
The company’s profitability is also notable, with InvestingPro data indicating a healthy gross profit margin of 66.86% over the last twelve months as of Q2 2024, aligning with the article’s mention of robust margins contributing to the company’s earnings outperformance. For investors seeking a more detailed analysis, InvestingPro offers additional insights into the company’s financial health and market position.
