Even amid an economic downturn, Intuitive Surgical (ISRG -1.90%) delivered third-quarter results that show the company is in peak physical condition. Beyond the top and bottom line numbers -- which gave the company a clean bill of health -- management shared other developments that show that even in the most trying times, the company is a smooth operator.

Furthermore, one of the revelations in its quarterly checkup is that Intuitive Surgical is making a huge investment in itself that will help shareholders become financially healthier in the balance.


Intuitive Surgical announced revenue of $1.56 billion, up 11% year over year. Headwinds from a strong dollar masked the full strength of the results, which grew 15% in constant currency. The performance was driven by robust growth in procedure volume, partially offset by fewer system placements. Growing surgical procedures increases the likelihood of future system purchases. Instruments and accessories revenue, which is recurring, jumped 15%, also fueled by a 20% increase in procedures. This resulted in earnings per share (EPS) of $1.19.

It's worth noting that both the top and bottom line numbers easily exceed expectations, with analysts' consensus estimates calling for revenue of $1.5 billion and EPS of $1.13.

There were some challenges. Given the macroeconomic conditions, it isn't unexpected that system revenue grew just 3% to $426 million. The number of da Vinci Surgical system placements slowed somewhat to 305, down from 336 in the prior-year quarter. Considering the price of the system, which can cost as much as $2 million, it isn't unusual for da Vinci sales to slow in times of economic uncertainty. The good news is that once the economy rebounds, there's usually pent-up demand for these surgical robots.

The doctor is in...

In addition to its already healthy results, Intuitive Surgical is taking steps that ensure it will stay in peak physical condition. The company revealed that it under an existing repurchase authorization, it spent more than roughly $1 billion buying back its common stock in the third quarter.

This is great news for investors since share repurchases signal management's confidence that the stock is undervalued. Furthermore, as the share count declines, investors own a larger portion of the business, with their stock entitled to a greater share of the profits.

Global recognition abounds

In a press release that came fast on the heels of its results, Intuitive Surgical announced that it had become "the largest provider of robotic-assisted surgical technology training to be accredited by the Royal College of Surgeons of England (RCS England)." The accreditation comes in recognition of the company's "outstanding surgery-related education and is an internationally recognized hallmark of quality." 

If that weren't enough Intuitive Surgical announced just weeks ago that its da Vinci SP is the first single-port surgical system cleared for use in Japan. The country's Ministry of Health, Labour, and Welfare (MHLW) cleared the da Vinci SP surgical system for use in general surgeries, thoracic surgeries (excluding cardiac procedures and intercostal approaches), urologic surgeries, gynecological surgeries, and trans-oral head and neck surgeries. Intuitive Surgical multi-port system has been in use in the country since 2009, with the country approving 29 robotic-assisted procedures since its debut. 

These developments show that even in the most trying of environments, Intuitive Surgical is setting the stage to continually expand its business.

Future prognosis? Great!

Since peaking late last year, Intuitive Surgical's stock looks somewhat anemic, falling more than 42% from its high. While its price-to-earnings ratio of 54 is still a bit pricey, it's back below pre-pandemic levels. Investors with the keen eye of a surgeon, however, will recognize that even as the stock is down, the business is as healthy as ever. That doesn't mean that the stock won't fall further from here, it certainly could, particularly given the current financial landscape.

However, management has signaled its continued confidence in Intuitive Surgical's prospects, spending billions of dollars buying back roughly seven million shares so far this year, decreasing its diluted share count by about 2%. Furthermore, its remaining repurchase authorization of $2.5 billion gives management plenty of additional room to operate. 

Intuitive Surgical also has a rock-solid balance sheet with nearly $7.4 billion in cash and no debt, giving the healthcare company the resources to weather the economic storm.

Taken together, the robust results, the declining share count, the strong financial position, and the cheaper stock price suggest Intuitive Surgical is a stock just "aching" to be bought.