What’s Next For Intuitive Surgical Stock After An Upbeat Q1?
Strong global adoption of da Vinci procedures fueled Intuitive Surgical’s (NASDAQ: ISRG) impressive Q1 performance. The company reported a 17% year-over-year increase in procedure volume, which contributed to revenues reaching $2.25 billion and adjusted earnings per share of $1.81. These figures exceeded consensus estimates of $2.19 billion and $1.73, respectively.
While ISRG’s stock price saw gains after the earnings release, we maintain a positive outlook on its future growth. We discuss more on this in the sections below. But, if you prefer a potentially less volatile investment option, the High-Quality portfolio has demonstrated strong historical performance, outperforming the S&P 500 with returns exceeding 91% since its inception.
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How Did ISRG Fare In Q1?
Intuitive Surgical’s revenue reached $2.25 billion in Q1 2025, a 19% year-over-year increase, primarily fueled by a 17% rise in global da Vinci procedure volume. This growth was supported by the placement of 367 da Vinci systems during the quarter, including 147 of the newly launched da Vinci 5 systems in the U.S. Consequently, Intuitive Surgical’s total installed base expanded by 15% year-over-year to 10,189 systems. Furthermore, the company’s operating margin improved by 90 basis points to 25.7% in Q1. The combination of higher revenues and margin expansion led to a significant 21% increase in net income, reaching $1.81 per share compared to $1.50 in the same period last year.
Looking ahead to the full year 2025, Intuitive Surgical anticipates global da Vinci procedure volume growth of 15% to 17%. However, the company expects its gross margin to decrease to a range of 65% to 66.5%, down from 69.1% in 2024, and anticipates an increase in operating expenses.
Is ISRG Stock Fairly Valued?
Following a strong Q1 report, Intuitive Surgical’s (ISRG) stock experienced an immediate upward trend. However, examining its performance over the preceding four years reveals a different characteristic: significant volatility in annual returns compared to the S&P 500. The stock’s annual returns during this period were 32% in 2021, -26% in 2022, 27% in 2023, and 55% in 2024.
In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Given the current uncertain macroeconomic environment around tariffs and trade war with China, could ISRG face a similar situation as it did in 2022 and underperform the S&P over the next 12 months — or will it see a strong jump? We estimate Intuitive Surgical’s Valuation to be $558 per share, reflecting around 10% upside.
Intuitive Surgical’s current stock price of $510 reflects a trailing price-to-earnings (P/E) ratio of 67, which is consistent with its five-year average P/E of 68. Historically, ISRG has commanded high valuation multiples, due to its limited competition in the robotic surgery market. This premium valuation could potentially expand further, driven by strong growth in da Vinci procedure volumes. In fact, our analysis – ISRG Stock To $5000? — presents a bullish outlook for Intuitive Surgical, projecting substantial growth in its share of overall surgical procedures.
While ISRG stock appears to have some room for growth, it is helpful to see how Intuitive Surgical’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
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