Shares of Intuitive Surgical (ISRG -1.34%) are down about 26% from a high-water mark they set earlier this year, but the healthcare stock's long-term shareholders aren't too upset. Despite the recent decline, shares of the robot-assisted surgical system provider are up by a whopping 5,490% over the past 20 years.
Shares of Intuitive Surgical have been beaten down this year in response to a competitive threat from Medtronic, a behemoth in the medical technology industry. The company's Hugo RAS system produced successful results in a urologic procedure study in April. Urologic procedures make up about 20% of all procedures performed with Intuitive's da Vinci machines.
Image source: Getty Images.
Medtronic submitted an application to the Food and Drug Administration in the first quarter that could allow the company to begin marketing its device in the U.S. in early 2026. Before getting too concerned about a competitive threat in the U.S., investors should know that Hugo RAS earned its first marketing approval from European regulators in 2021. Sales still aren't high enough to be mentioned in the company's earnings reports.
In 2024, da Vinci systems performed 2.68 million procedures. Last year alone, the company increased the number of da Vinci machines in hospitals by 1,790 to reach a whopping 11,040 around the globe.
The hospitals that invest in da Vinci systems also invest a great deal in training the surgical teams that operate them. The switching costs are so high that competitors like Medtronic have a hard time gaining market share.
Despite falling a long way this year, shares of Intuitive Surgical are still trading north of 55 times earnings estimates. That's a high valuation, but the company also expects procedure volume to soar by 15.5% to 17% this year. Investors with a high risk tolerance probably want to take a closer look.
