Shares of robotic surgery pioneer Intuitive Surgical (NASDAQ: ISRG) have been soaring lately. A preliminary look at sales results from the fourth quarter of 2024 suggests its business is on the right track.
Intuitive Surgical’s recent performance and forward outlook are outstanding, and investors have noticed. Shares of the well-established medical technology business rose 62% during the 12-month period that ended Jan. 22, 2025.
Is it still a good time to buy Intuitive Surgical, or has it risen too far already? Below, I’ll look at some of the reasons the stock has been soaring to see if it’s not too late to buy some shares.
On Jan. 15, Intuitive Surgical announced preliminary results from the fourth quarter of 2024. Its da Vinci surgical robot system represents a big investment for hospitals, but it’s one they’re willing to make. Hospitals worldwide placed 493 da Vinci surgical systems in the third quarter, 174 of which were new da Vinci 5 systems.
The new da Vinci 5 system costs between $2 million and $2.5 million. This is significantly more than previous iterations but isn’t preventing hospitals from buying or leasing the new systems.
Intuitive Surgical’s latest surgical system could have an important advantage over the competition. Unlike Stryker‘s endoscopic tower equipment, da Vinci 5 integrates visualization and other features into a single tower.
Intuitive Surgical isn’t just placing lots of next-generation surgical systems, it’s selling heaps of instruments that must be replaced following each procedure. Fourth-quarter instrument and accessory sales bounced 23% higher year over year to $1.4 billion, or 58.5% of total revenue.
In addition to reporting unaudited preliminary results from the fourth quarter of 2024, Intuitive Surgical issued guidance for 2025. The company reported an 18% rise in da Vinci procedure volume in 2024 that could subside slightly this year. Management expects procedure volume to rise by 13% to 16% in 2025.
As the only company selling the instruments and accessories hospitals need to use their da Vinci 5 robots, Intuitive Surgical has a lot of pricing power. Sales of instruments and accessories sales tend to outpace procedure volume by a few percentage points. In other words, the company’s largest revenue stream will likely rise by more than 13% in 2025.
In addition to an integrated tower, the new da Vinci 5 system includes a force feedback feature that allows surgeons to sense the push and pull forces exerted on tissues with their fingers instead of relying on visual clues.