Intuitive Surgical stock (NASDAQ: ISRG) saw an 8% rise on Wednesday, January 15, after the company reported upbeat Q4 preliminary sales. It expects sales of $2.4 billion in Q4, reflecting a solid 25% y-o-y growth. This is much higher than 14% y-o-y growth to $2.2 billion per the consensus estimates. Total procedure volume was up 18% in Q4. This strong performance for Intuitive Surgical was driven by its new system – da Vinci 5 – launched last year. Out of 493 systems the company placed in Q4, 174 were da Vinci 5. Furthermore, the company expects total procedure volume to grow between 13% and 16% in 2025. Separately, see Why Did FTAI Stock Plunge 24%?
This volume growth for ISRG boded well with the investors, evident from the recent stock rally. In fact, ISRG stock has risen 72% since the beginning of 2024, outperforming its peers as well as the broader markets. However, looking at a slightly longer term, the increase in ISRG stock over the last four-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were 32% in 2021, -26% in 2022, 27% in 2023, and 55% in 2024. The Trefis High Quality 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 rate cuts and changes in the White House, 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 will update our model to take into account the Q4 results after the company reports its full-year results next week. At its current levels of $580, ISRG stock trades at 25x trailing revenues, which is higher than the stock’s average P/S ratio of 20x over the last five years. Now, a slight rise in valuation multiple seems justified, given the strong growth in procedure volume as well as the company’s sales. 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 is seeing higher levels, 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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