What we think about Intuitive Surgical (ISRG)
Intuitive Surgical in Three Words: Robotic Surgery Pioneer
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Background
A pioneer in robot-assisted minimally invasive surgery with a multi-decade lead over competitors, Intuitive Surgical has solidified its market leadership through continuous expansion and diversification of its surgical procedures. The company’s da Vinci surgical system now supports a wide array of surgeries, contributing to 2.3 million successful surgeries in 2023 (+22% YoY). Operating on a robust “robots and blades” business model, Intuitive Surgical enjoys a high recurring revenue stream, primarily from the sale of disposable instruments and accessories used in surgeries. This model, coupled with a strong moat in a highly regulated industry, ensures financial stability and predictability.
The company’s presence in over 70 countries and its status as the standard for prostate cancer surgery in the US further reinforce its global dominance. Latest quarter revenue was $1.89 billion (+11% YoY), with 83% of revenue now recurring. The most recent generation da Vinci 5 platform received FDA clearance in March 2024, and has begun deployment. This upgraded platform offers significant improvements over prior generations, including “force feedback” in some commonly used instrument lines – sensors built into the body end of the instrument that provide pressure feedback to the surgeon. In trials, this has been found to reduce the overall amount of force applied to tissue during surgery, which could provide clinically meaningful improvements in patient outcomes.
Intuitive Surgical’s focus on continual innovation, global expansion, and consistent financial performance, including a healthy balance sheet and cash flow, make it an attractive option for long-term investors in the medical technology space.
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