$Intuitive Surgical(ISRG)$ is scheduled to release its quarterly earnings for fiscal Q1 2025 on 22 April 2025 after the market close.
The consensus revenue is forecast to be around around $2.18 billion to $2.19 billion. This would represent roughly 15% growth compared to the $1.89 billion revenue in Q1 2024.
For the consensus estimate for the earnings per share (EPS), it is generally range from $1.71 to $1.73 per share. This would represent a significant increase (around 14%-15%) compared to the $1.50 per share reported in Q1 2024. Some earlier estimates cited $1.36 per share.
As per tipranks forecast, we are looking at a $1.74 earnings per share consensus estimate.
Intuitive Surgical (ISRG) Last Positive Earnings Call Saw Share Price Decline By 20.92%
ISRG had a positive earnings call on 23 Jan 2025 which saw its share price decline by 20.92% since.
The earnings call presented a generally positive outlook for Intuitive with strong financial performance, successful product launches, and significant procedure growth. However, challenges such as competitive pressures in China, declining bariatric procedures, and expected margin pressures were noted, indicating areas of concern.
Intuitive Surgical (ISRG) Guidance On Capital Expenditure
During the Q4 2024 earnings call, Intuitive Surgical provided guidance for 2025, highlighting several key metrics. The company anticipates full-year procedure growth to be within a range of 13% to 16%, reflecting factors such as the impact of market dynamics in China and CapEx constraints in Europe. Pro forma gross profit margin is expected to be between 67% and 68% of net revenue, influenced by increased depreciation, product mix, and currency effects. Operating expenses are projected to grow by 10% to 15%, driven by investments in innovation and legal expenses.
Other income is expected to range between $370 million and $400 million, with capital expenditures projected at $650 million to $800 million. The company also estimates a pro forma income tax rate of 22% to 23%.
Factors Influencing Intuitive Surgical (ISRG) Q1 2025 Earnings
Intuitive achieved revenue of $8.4 billion for the year, representing 17% growth over 2023. Net income grew by 29% in 2024 over 2023.
Here are some drivers that we might want to consider for ISRG earnings.
Growth Catalysts
Procedure Volume: Expansion into new surgical specialties (e.g., colorectal, hernia) and international markets (e.g., Europe, Asia).
Procedure Growth: Continued strong growth in da Vinci procedures is expected, which drives recurring revenue from instruments and accessories. This remains a key focus area after the company's 2025 full-year procedure growth guidance (13%-16%) issued in January was seen as potentially conservative compared to 2024's growth.
Global procedure growth for the full year was 17%, with notable strength in general surgery, thoracic surgery, and flexible robotics Ion procedures showing 78% growth.
Procedure growth in China was slightly below the corporate average due to competitive and environmental dynamics.
Product Innovation: New platforms like da Vinci 5 (pending FDA approval) or upgrades to existing systems. da Vinci 5 Launch: The performance and initial adoption trends for the newer da Vinci 5 system will likely be a point of interest.
Placed 362 da Vinci 5 systems in 2024, with over 2,500 surgeons performing more than 32,000 procedures. Da Vinci 5 contributed to higher system ASP due to its advanced features.
Ion Platform: Growth in robotic bronchoscopy for lung biopsies. Bariatric procedures fell modestly for the full year 2024, impacted by the rise in GLP-1 medications.
Recurring Revenue: Higher installed base drives consumables/service revenue (~70% of total sales).
System Placements: Analysts anticipated placements of around 349 da Vinci systems, an increase from the 313 placed in Q1 2024. Growth in the installed base is also expected, potentially exceeding 10,000 systems globally.
Placed 1,432 multiport systems in 2024, compared to 1,313 in 2023. Ion placements increased from 213 to 271, and SP placements grew from 57 to 96.
Competitive Landscape
Rivals like Medtronic (Hugo), J&J (Ottava), and CMR Surgical (Versius) may pressure pricing or market share.
ISRG’s first-mover advantage and surgeon training ecosystem remain strengths.
Macro/Regulatory Risks
Hospital capital spending (interest rates, budgets).
Regulatory delays or safety concerns (e.g., recalls, cybersecurity for connected devices). Potential impact from increased competition and regulatory approvals affecting selling cycles and market dynamics.
Supply chain stability for semiconductor/components.
Financial Metrics to Watch
System Placements: Indicator of future recurring revenue.
Margins: Impacted by product mix (higher-margin services vs. lower-margin hardware). Pro forma gross profit margin expected to be within a range of 67% and 68% in 2025, down from 69% in 2024, due to increased depreciation, product mix, and FX impact.
R&D Investment: ~10% of revenue; critical for maintaining tech leadership.
Intuitive Surgical (ISRG) Price Target
Based on 22 Wall Street analysts offering 12 month price targets for Intuitive Surgical in the last 3 months. The average price target is $637.78 with a high forecast of $711.00 and a low forecast of $560.00. The average price target represents a 32.12% change from the last price of $482.74.
I think in order to look at how ISRG share price target would be heading, we need to look at how analyst are looking at the segment revenue estimates (approximate), Instruments & Accessories: ~$1.33 billion Systems: ~$482 million Services: ~$357 million.
This would mean that despite operating expenses concerns, the performance by the various segments are still well-received. We could see a potential upside movement in its price target.
Technical Analysis - Exponential Moving Average (EMA)
If we looked at how ISRG share price have been trading, there is not much momentum seen from the RSI, and also the share price seems to be traded downside and eventually making a sideway trade.
We need to see ISRG procedure growth accelerates, da Vinci 5 gains traction, and margins expand in order for the bulls to take control again.
With competition intensifies, macro pressures reduce hospital spending, or innovation stalls, it seems like the bears might be in control for quite a while, before we see improvement in the China-US talks and also how the pharma tariffs would eventually hit ISRG.
Summary
ISRG’s long-term prospects hinge on procedure adoption, innovation, and recurring revenue resilience. Analysts expected continued solid growth in revenue and earnings, driven primarily by procedure volume increases. The market will be watching closely for confirmation of these trends and any updates to the full-year outlook when the report is released on 22 April.
I think we might want to focus on whether ISRG reiterates or updates its full-year 2025 guidance, particularly concerning procedure volume growth.
Appreciate if you could share your thoughts in the comment section whether you think ISRG could manage their operating expenses well and continue to see growth from its procedure growth, despite some challenges in China.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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