ISRG Stock Poised for Growth with Da Vinci Surge Amid Earnings Stability

Intuitive Surgical, Inc. is poised to announce its second-quarter 2025 financial results on April 22, with anticipation surrounding the company's performance amid stable earnings expectations. The Zacks Consensus Estimate positions the company's sales at $2.35 billion and earnings at $1.92 per share. Analysts forecast earnings per share at $7.84 for 2025 and $9.05 for 2026, having remained consistent over the past month. The company anticipates a 15-17% growth in worldwide da Vinci procedures for 2025, which is expected to positively impact its top-line results in the upcoming earnings report.

In the previous quarter, Intuitive Surgical exceeded earnings estimates by 5.85%, continuing a trend of earnings surprises over the past four quarters with an average beat of 14.64%. However, current indications do not conclusively suggest an earnings beat for the upcoming report. The company's Earnings ESP stands at 0.00% with a Zacks Rank 2.

The Instruments & Accessories segment is expected to exhibit strong results, driven by substantial growth in da Vinci procedures, particularly in U.S. general surgery and cancer treatments in international markets. However, a decline in bariatric procedures demand in the United States may offset these gains. Growth in China has improved, largely driven by urologic procedures, although tariff-related challenges may have affected overall sales.

Intuitive Surgical's Systems segment should benefit from the continued adoption of the new da Vinci 5 systems, with more placements anticipated in the second quarter after placing 147 systems in the first. The segment's revenue may be bolstered further by a stronger average selling price observed in previous quarters. However, an increase in associated expenses is expected due to the broader rollout of the da Vinci 5 systems planned for later in 2025.

The Services segment's results are likely to reflect the robust uptake of Intuitive's digital offerings. Nonetheless, margins may face pressure due to the recent launches and increased depreciation expenses, despite potential offsets from cost reductions and fixed overhead leverage.

In assessing Intuitive Surgical's market performance, the company has seen its share price decrease by 0.7% so far this year, trailing the S&P 500's 6.5% gain. Despite this, the company has outperformed its industry peers, such as Thermo Fisher Scientific's significant decline.

As for valuation, Intuitive Surgical trades at a premium with a forward P/E ratio of 60.92X against the industry average of 27.90X, reflecting its growth prospects despite a historically high valuation. The current Value score of D indicates a high valuation level persist.

Looking ahead, Intuitive Surgical is projected to maintain strong performance through 2025, driven by growth in da Vinci and Ion procedures and improved procedure pricing. However, global trade tensions, particularly concerning tariffs, could introduce uncertainties impacting future performance. Nevertheless, Intuitive Surgical's manufacturing capabilities in the United States and Mexico are expected to mitigate some tariff risks.

In summary, while Intuitive Surgical shows strong fundamental factors supporting its growth trajectory, potential investors are advised to closely watch the upcoming earnings release to gain further insights into the company's ongoing strategies and market conditions. The elevated valuation may reflect anticipated growth, underlining the need for careful analysis before new investments. Existing shareholders might consider maintaining their position pending the earnings outcome.