Intuitive Surgical (ISRG) Stock Forecast & Price Target

Intuitive Surgical's stock outlook is positively influenced by a 14% growth in Ion utilization, alongside a slight uptick of 2% in Da Vinci utilization in the US, indicating strong procedural growth and increased efficiency from the newer D5 systems. The company has successfully expanded its installed base, with significant growth in the SP segment as evidenced by a 35% increase in utilization and an increase in the installed base to 345 systems. Additionally, Intuitive Surgical has raised its gross margin guidance to 67-67.5%, driven by higher US system placements and an improved outlook on tariffs, suggesting robust financial health and operational efficiency.

The outlook for Intuitive Surgical is negative due to several fundamental concerns, including lower-than-expected services revenue of $396 million and the impact of macroeconomic uncertainty on hospital capital budgets, which may result in deferred robotic system purchases. Furthermore, the company is facing resistance to its novel platforms, ongoing challenges in international markets due to budget constraints, and a potential negative impact on consumable average selling prices and utilization rates from third-party instrument reprocessing. Additionally, the decline in bariatric procedures, combined with slower than anticipated rollouts of new systems and tariffs on imports, further complicates the revenue growth potential, especially as I&A growth remains less correlated with the adoption of new systems like the Dv5.