What happened

Shares of robotic surgery specialist Intuitive Surgical (ISRG 0.71%) tumbled 6.8% through 12:30 p.m. ET on Friday after missing analyst forecasts for both sales and earnings last night.

Heading into its fiscal second-quarter 2022 earnings report, Wall Street had predicted that Intuitive Surgical would earn $1.19 per share, pro forma, on $1.56 billion in quarterly sales. But the company earned only $1.14 per share on sales of just $1.52 billion.  

So what

In the second quarter, the installed base of da Vinci surgical-assist robots was up 13% since a year ago, and procedures performed using those robots (important because they require consumables) grew 14%. That's a good start. It helped Intuitive's revenue from sales of instruments and accessories grow 12%.  

On the other hand, Intuitive sold 15% fewer da Vincis to its hospital clients in the second quarter than it did a year ago, so the pace of expansion does seem to have slowed in this particular quarter. Overall sales growth, accordingly, was also slow: just 4% better than a year ago. And GAAP profits took a particularly steep dive, falling 40% year over year to just $0.85 per share.

Now what

Looking ahead, CEO Gary Guthart warned that the ongoing pandemic continues to depress procedure volumes (and thus sales of consumables) at the company. Guthart added that supply chain kinks are interfering with production and delivery of medical robots, subtracting perhaps 5% from potential sales growth of those units in the second quarter, according to comments reported on TheFly.com.

The good news is that, despite these trends, Intuitive believes procedure growth will accelerate slightly later this year, such that full-year procedure growth might be as good as 14% to 16.5%.

At the same time, Intuitive's hospital customers appear to be tightening their budgets and keeping a tight rein on spending, which could further impact sales as the year progresses. So the situation is still very much up in the air.

With growth so uncertain, at least in the near term, it's hard to justify Intuitive Surgical's pricey valuation of 56 times trailing earnings. And with long-term growth currently forecast to remain below 10% annually over the next five years, I simply don't think that now is a great time to invest in the stock.