Intuitive Surgical (ISRG) beat Wall Street’s quarterly sales and profit expectations, but ISRG stock tumbled Friday as procedure volume moderated sequentially and as new weight-loss drugs pressure bariatric surgery.
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During the June quarter, the number of procedures using Intuitive Surgical’s main product, the da Vinci robotic surgery system, grew 22% year over year. But that slowed from 26% growth in the first quarter. On an annual compounded basis, procedures have grown 17% from the second quarter of 2019.
The company called for 20%-22% procedure growth for the year. This brings the compounded annual growth rate to about 16.5% from 2019, Evercore ISI analyst Vijay Kumar said in a note to clients.
“While one can write this off as conservatism, Intuitive Surgical commentary on a slowdown in bariatric procedures due to GLP-1 weight-loss drugs gives reason for pause,” he said. He kept his in-line rating on ISRG stock, but cut his price target to 315 from 325.
Also, notably, Intuitive Surgical’s installed da Vinci systems lagged expectations at 8,042 globally, an increase of 12.5% year over year. Analysts polled by FactSet expected a bigger jump to 8,203. As a result, systems revenue of $393 million lagged expectations by $23 million.
In afternoon trading on the stock market today, ISRG stock toppled 3.6% near 335.20. Shares have a strong Relative Strength Rating of 92 out of a best-possible 99, according to IBD Digital. This puts ISRG stock in the top 8% of all stocks when it comes to 12-month performance.
ISRG Stock: Sales, Earnings Beat
Overall, however, the second quarter largely represented an earnings beat for Intuitive Surgical. Sales advanced 15% to $1.76 billion, topping predictions for $1.74 billion. Adjusted profit ballooned nearly 25% to $1.42 per share. Analysts expected Intuitive Surgical to earn $1.33 per share.
Though slower than the first quarter, procedure growth was still helped by an easy comparison from the year-earlier period. During the same three months of 2022, increasing Covid cases cut down on procedure growth. That wasn’t the…
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