Procept BioRobotics: A High-Growth Buy with Strengthening Pricing Power and Global Expansion Momentum

In the rapidly evolving landscape of surgical robotics, Procept BioRobotics (PRCT) stands out as a compelling investment opportunity. Despite near-term leadership uncertainty, the company's robust average selling price (ASP) growth, margin expansion, and accelerating international adoption position it as a high-conviction "Buy." This article unpacks how these fundamentals justify a bullish outlook for the stock.

ASP Growth: A Testament to Value Appreciation

Procept's ASP for capital equipment has surged from $325,000 in 2022 to $435,000 in Q1 2025, reflecting a 34% increase over three years. For 2025, the company set conservative full-year ASP guidance of $430,000–$440,000, with Q2 2025 already hitting $455,000 for greenfield placements. This trajectory underscores the market's recognition of the AquaBeam and Hydros systems' clinical value and technological differentiation.

The company's pricing strategy is both disciplined and flexible. While maintaining strict control over consumable pricing, Procept negotiates capital equipment terms to accelerate hospital adoptions. This approach balances short-term revenue with long-term procedure growth, as hospitals gain access to the technology faster. Seasonal trends also play a role: Q1 ASPs are typically lower due to slower capital equipment sales, but Q4 2024 saw a peak of $460,000, highlighting upside potential.

Margin Expansion: Operational Efficiency Fuels Profitability

Procept's gross margin has expanded from 59% in Q2 2024 to 65% in Q2 2025, with trailing twelve months (TTM) gross margin climbing from 50% in 2021 to 62.9% in March 2025. This improvement stems from higher ASPs, better overhead absorption, and operational efficiencies. The company projects a full-year 2025 gross margin of 64.5%, a conservative target given its momentum.

While global tariffs could pressure margins by $1–2 million, the company's strong pricing power and cost controls mitigate this risk. Notably, Procept's gross profit in Q2 2025 reached $51.7 million, up 48% year-over-year, even as operating expenses rose to $73.9 million. The narrowing net loss—from $25.6 million in Q2 2024 to $19.6 million in Q2 2025—signals improving operational leverage.

International Expansion: A New Growth Engine

Procept's international revenue surged 69% year-over-year in Q2 2025 to $9.6 million, driven by greenfield placements in Europe and Asia. The company's focus on expanding its installed base in the benign prostatic hyperplasia (BPH) and early-stage prostate cancer markets is paying off. With $305.8 million in cash and a disciplined capital allocation strategy, Procept is well-positioned to fund global expansion without diluting shareholders.

The AquaBeam system's integration of ultrasound technology—a first in the industry—creates a durable competitive moat. As reimbursement rates and APC levels stabilize globally, the company's ability to deliver cost-effective, minimally invasive procedures will drive further adoption.

Leadership Uncertainty: A Short-Term Headwind, Not a Showstopper

Procept's leadership changes, including the departure of its CEO in early 2025, have introduced near-term uncertainty. However, the company's strong balance sheet, clear product roadmap (including the WATER IV prostate cancer trial), and proven commercial execution reduce the risk of operational disruption. The board's focus on retaining key R&D and sales talent further insulates the business from leadership volatility.

Investment Thesis: Buy for Long-Term Growth

Procept BioRobotics is a high-growth stock with a compelling risk-reward profile. Its ASP growth, margin expansion, and international traction justify a "Buy" rating despite short-term leadership noise. The company's ability to monetize its installed base through consumables and procedures—while maintaining pricing discipline—creates a scalable, high-margin business model.

For investors, the key catalysts include:
1. ASP upside as the installed base grows and clinical outcomes reinforce value.
2. Margin expansion from operational efficiencies and scale.
3. International revenue acceleration in underpenetrated markets.

In conclusion, Procept BioRobotics is a rare combination of innovation, pricing power, and global scalability. While leadership transitions may cause short-term volatility, the company's fundamentals are firmly aligned with long-term value creation. For those with a 3–5 year horizon, PRCT offers an attractive entry point into the surgical robotics revolution.

Final Verdict: Buy.