Shares of leading robotic-assisted surgery (RAS) specialist Intuitive Surgical (ISRG +0.10%) are up 8% as of noon ET on Wednesday after the company sailed past Wall Street's expectations with its first-quarter earnings. Intuitive Surgical grew sales and adjusted earnings per share by 23% and 38%, respectively, and guided that its next-gen da Vinci system will see procedure growth of 13.5% to 15.5% this year, spurring the stock's healthy rally today.
NASDAQ: ISRG
Key Data Points
Intuitive Surgical reported that:
- total procedures grew 17%
- Ion procedures (bronchoscopies for early lung cancer detection) increased 39%
- overall instrument placements grew roughly 4%
- instrument and accessory sales grew 23%
- recurring revenue (accessories and services) now equals 86% of total revenue
- it repurchased 0.65% of its shares outstanding in Q1 for $1.1 billion
Image source: Getty Images.
In simplest terms, it was an excellent quarter for Intuitive Surgical, as the company delivered its 13th-straight quarter of double-digit sales growth or higher. On top of the figures listed above, Intuitive Surgical delivered 19% growth in da Vinci procedures outside of the United States. These international markets now account for 38% of total da Vinci volume and highlight steady adoption internationally as "expanded reimbursement coverage and policy changes in Japan and Europe" help fuel global expansion.
Elsewhere, Intuitive Surgical continues to make incremental innovations that help keep the company the leader in its niche. One example of this is its force-feedback instrumentation, which reduces tissue forces and improves surgical outcomes. President David Rosa spoke about the potential of this new instrumentation, saying, "In March, we received FDA 510(k) clearance for additional uses of our Force Feedback instruments. Five of 6 instruments are now cleared for 15 uses, while our Mega SutureCut Needle Driver is cleared for 10 uses."
Powered by innovations like these -- paired with the long-term ambition to make telesurgery (remote RAS) common -- Intuitive Surgical's growth story is far from over in my eyes. Trading at 49 times forward earnings, Intuitive Surgical commands a well-deserved premium valuation, but considering its track record of double-digit sales growth and industry-leading innovation, I'm happy to keep adding to my shares over time.
