Intuitive Surgical delivered a standout second-quarter performance that topped Wall Street estimates on both revenue and profit, but investors responded by sending the shares to a new 52-week low. The disconnect highlights mounting anxiety over a deceleration in the company’s core US market, where procedure growth has started to waver even as the robotics pioneer rolls out its latest da Vinci 5 systems at a brisk pace.
Revenue for the three months ended June 30 came in at $2.89 billion, a 19% jump from a year earlier and comfortably above the $2.82 billion consensus forecast. Adjusted earnings per share reached $2.80, well ahead of the $2.51 analysts had penciled in, while GAAP net income landed at $818 million, or $2.29 per diluted share. The company also strengthened its balance sheet, adding $0.7 billion in cash and deploying $380 million on share buybacks.
Yet the stock tumbled 12.58% on the day, closing at €307.95 and marking a new 52-week trough. That leaves the equity roughly 32% below the all-time high it touched in January. The violent sell-off was fueled by a softening in domestic procedure volumes: US da Vinci procedures grew just 12% in the second quarter, down from 14% in the first three months of the year. Internationally, by contrast, procedure growth remained robust at 20%.
Management pointed to a confluence of headwinds in its largest market. Analysts cite changes to insurance subsidies under the Affordable Care Act, which have dampened patient demand and premium dynamics, alongside the booming popularity of GLP-1 weight-loss drugs that are prompting some patients to postpone bariatric surgeries. The secondary impact of these weight-loss medications — a high-single-digit decline in surgical weight-loss procedures — is adding to the pressure on Intuitive’s US volumes.
Should investors sell immediately? Or is it worth buying Intuitive Surgical?
Compounding the unease, the company merely reaffirmed its full-year guidance for global da Vinci procedure growth of 13.5% to 15.5%, failing to raise the bar despite the strong first half. Many analysts had expected the midpoint or higher. “The implied trajectory points to a softer second half,” one research note observed. A separate Class II recall for certain electronic brake components on da Vinci systems also stirred concerns about product risk, though the financial impact is expected to be manageable.
Nevertheless, the operational highlights were hard to ignore. Intuitive placed 468 new da Vinci systems during the quarter, with more than half — 246 units — being the newer da Vinci 5 model. The total installed base rose 12% to 11,710 systems. Recurring revenue from instruments, accessories, and service continues to anchor the business, representing 85% of total sales. The company also lifted its full-year gross margin guidance to a range of 68%–69%, up from previous levels.
Analyst reactions were mixed. Stifel cut its price target to $550 from $670 but kept a Buy rating, while Baird lowered its target to $500 from $525, retaining an Outperform call. BTIG reduced its target to $469, and Deutsche Bank issued a Sell rating with a $366 target, reflecting the most bearish view. Looking ahead, Intuitive plans to launch a program for longer-lasting instruments in the first half of 2027, aiming to lower hospital costs for standard procedures — a step that may help defend its competitive moat against challenges from Medtronic’s Hugo and Johnson & Johnson’s Ottava. For now, though, the market is focused on the US deceleration, punishing a stock that, on paper, posted one of its best quarters ever.
Ad
Intuitive Surgical Stock: Buy or Sell?! New Intuitive Surgical Analysis from July 17 delivers the answer:
The latest Intuitive Surgical figures speak for themselves: Urgent action needed for Intuitive Surgical investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from July 17.
Intuitive Surgical: Buy or sell? Read more here...
