Intuitive Surgical (ISRG 0.03%) has been a pioneer in robot-assisted surgery, first with its da Vinci surgical system, and more recently with its Ion endoluminal system, which is used to perform robotic-assisted bronchoscopy (a less invasive way to look at suspicious lung nodules).

The company makes its revenue from selling its systems to hospitals and surgical centers, servicing them, and providing a steady stream of the disposable items its robots use up during operations. It has a wide moat in its niche.

However, its shares are trading near a 52-week low, down more than 47% year to date. Should investors view that plunge as an opportunity or a signal for further caution? Let's take a look.

It's nice to be No. 1

Intuitive's first da Vinci surgical system was cleared by the Food and Drug Administration in 2000 and that early-mover status continues to aid the company.

The latest da Vinci system, the da Vinci SP (single-port), includes three multi-jointed-wristed instruments and a 3D HD camera -- an interface that gives surgical operations a video game-like feel. One advantage to the SP is that its single arm offers a 360-degree range of motion.

These systems are expensive to develop and purchase (often costing more than $2 million each), and then to train surgeons on. This gives competitors a high bar to clear, making it more likely that hospitals will stick with their da Vinci systems once they've started using them, because switching would be too expensive.

More than 10,000 types of surgery have been done using da Vinci systems, more than 6,500 machines are in use in hospitals, and more than 55,000 surgeons have been trained on the system. All of this provides a certain stickiness to the company's revenue base.

More competitors are starting to push into the robot-assisted surgery space, but Intuitive has no real direct rivals. Medtronic has a robotic system, the Hugo, that like the da Vinci, can operate on soft tissues, and it is used for urological and gynecological surgeries. However, Medtronic isn't solely focused on robotic surgery, and the Hugo only just got its CE Mark approval in Europe last year.

Lower earnings led to a stock price plunge

Intuitive's shares sit just above their 52-week low of $183.53, and down about 50% from their 52-week high of $369.69. The company took a hit over the past couple of years because the COVID-19 pandemic reduced the number of elective surgeries being performed, and also because of supply chain issues, particularly the microchip shortage.

In the second quarter, Intuitive reported that revenue rose 4% year over year to $1.52 billion, but net income was $308 million (or $0.85 per share), down from $517 million (or $1.42 per share) in the same period a year ago.

The company also saw a slowdown in installations, with only 279 da Vinci new surgical systems placed during the quarter, down 15% from the 328 placed in Q2 2021. The subsequent stock price drop pushed the company's price-to-earnings ratio down to 48. While that may still seem high, consider how much growth lies ahead for Intuitive. Over the past 10 years, the company's revenue grew 150%. It will be hard for Intuitive to maintain that growth rate, but given that only 3% of surgeries are currently done with robot-assisted surgical systems, there's plenty of potential for more sales.

A recent report by Polaris Market Research forecasts a 21.9% compound annual growth rate for robotic surgeries between 2021 and 2028, with the market size reaching $10.3 billion by the end of that period.

R&D will still be key

To stay at the top of the robot-assisted surgery market, Intuitive spends a great deal on research and development. Based on its outlays through the first half, Intuitive is on pace to spend a company-record $836.2 million on R&D this year. Since the first da Vinci system was approved 22 years ago, the company has increased its annual R&D spending by 621%.

But it can afford to spend to stay ahead because it had $8.2 billion in cash and investments on the balance sheet -- and no debt -- as of the end of Q2. That means it is less affected than its competitors by rising interest rates.

The healthcare company got two key clearances this year that should help it continue to boost revenue. On June 30, the Food and Drug Administration cleared its mobile cone-beam CT imaging technology to go along with its Ion Endoluminal System, giving surgeons more stability for precision in lung biopsies.

Then on Sept. 30, the company got clearance from Japan's Ministry of Health, Labour and Welfare for the da Vinci SP system to be used in general surgeries, plus thoracic (excluding cardiac procedures and intercostal approaches), urologic, gynecological, and trans-oral head and neck surgeries.

While the COVID-19 pandemic cut into Intuitive's business because so many elective procedures were postponed or canceled, and also because it created a wave of lingering supply chain issues, both of those problems are likely to ease in the coming months and years. That should allow Intuitive to continue growing and improving its bottom line.