Stock-Split Watch: Is Intuitive Surgical Next?

Intuitive Surgical (ISRG) has been on a tear, with its stock price soaring nearly 200% over the past five years. As the company's shares approach the $600 mark, investors are wondering if a stock split is on the horizon. After all, Intuitive Surgical has a history of splitting its stock, having done so three times before in 2003, 2017, and 2021. But is the company really ripe for another split?

To answer this question, let's first look at the factors that indicate Intuitive Surgical is a strong candidate for a stock split:

1. Stock Price: ISRG's stock price has climbed significantly in recent times, reaching around $600 per share. In the past, the company has split its stock when the price reached or surpassed $1,000. However, the company has also split its stock at lower prices in the past, such as in 2017 when the stock price was around $700.
2. Market Capitalization: ISRG's market capitalization has grown significantly, reaching over $100 billion. In the past, the company has split its stock when its market capitalization was around $50 billion. This indicates that the company's value has grown significantly, and a stock split could make the shares more accessible to a broader range of investors.
3. Historical Stock Splits: ISRG has a history of splitting its stock, having done so three times before. The most recent stock split occurred in 2021, which was only four years after the previous split in 2017. If the company keeps this pace, it may announce a split this year.
4. Catalysts for Growth: ISRG has a big catalyst to keep its momentum going, having recently launched the latest version of its flagship da Vinci surgical robot. The ongoing rollout of the da Vinci 5 should add to earnings in the quarters to come. In the most recent quarter, ISRG placed 493 da Vinci systems and 174 of them were da Vinci 5 platforms. This momentum could keep earnings strong and the share price climbing toward the $1,000 level that previously coincided with the announcement of a stock split.



However, there are also reasons why Intuitive Surgical might not rush into a stock split just yet:

1. Recent Stock Split: The company's last two stock splits occurred in 2017 and 2021, with only four years between them. If Intuitive Surgical keeps this pace, it may wait a few more years before announcing another split.
2. Stock Price Trajectory: While ISRG's stock price has climbed significantly, it's still a little more than halfway to the $1,000 level that previously coincided with stock split announcements. The company might wait to see how the stock progresses this year before making a decision.

In conclusion, while Intuitive Surgical shows several signs that it could be ripe for a stock split, the company may wait a few more years before announcing another one. The ultimate decision will depend on the company's stock price trajectory and management's assessment of the best time to make the move. In the meantime, investors should keep an eye on ISRG's stock price and any announcements from the company regarding a potential stock split.