Robotic Surgery giant Intuitive Surgical (ISRG) is heading into 2024 “with strong momentum,” an analyst said Wednesday as ISRG stock popped on the company’s bullish preannouncement.
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During the fourth quarter, Intuitive Surgical generated $1.93 billion in sales, easily beating the Street’s estimate for $1.89 billion, according to FactSet. The lion’s share of the beat comes from systems revenue, which came in at $480 million and topped projections by 13%, William Blair analyst Brandon Vazquez said in a report.
“The bottom line is that Intuitive is clearly heading into 2024 with strong momentum, with another period of high-teens to 20%-plus (instruments and accessories) growth and better-than-expected system placements,” Vazquez said in a report.
In morning trades on today’s stock market, ISRG stock jumped more than 5% to 349.37.
Intuitive shares ended Tuesday’s session in a buy range above a 318.26 buy point in a cup-with-handle base, according to MarketSmith.com. Wednesday’s early action put shares beyond the buy range — which extends to 334.17. Wednesday’s early move also appeared set to clear the recent high of 340.49. Aggressive investors could potentially use that mark as an opportunity to add to existing positions.
ISRG Stock: Strong Procedure Growth
Intuitive Surgical is best-known for its da Vinci robotic surgery system.
In the December quarter, there was a 21% increase in the number of procedures performed using the da Vinci system. Over the course of 2023, there were about 2.29 million surgical procedures performed using the system, up 22% over 2022.
This year, Intuitive Surgical expects surgical procedures to climb 13% to 16% worldwide.
Procedure growth is an important metric for Intuitive Surgical. Each procedure requires the use of one-time instruments and accessories. Preliminary, fourth-quarter sales of instruments and accessories rose 22% to $1.14 billion. Throughout 2023, sales of those items climbed 22% to $4.28 billion.
William Blair’s Vazquez kept his outperform rating on ISRG stock.
“We expect Intuitive can continue this momentum into 2024 with more than 60% of applicable procedures (or cases da Vinci is currently labeled for) still performed manually, leaving ample room for growth as accounts look to drive (return on investment) on robotic investments by converting additional cases to da Vinci,” he said.
Alan Elliott contributed to this report.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.
