Intuitive Surgical (ISRG) Last Update 4/26/22
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Intuitive Surgical
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Intuitive Surgical Company


  1. Intuitive Surgical Products constitute 79% of the Trefis price estimate for Intuitive Surgical's stock.
  2. Intuitive Surgical Services constitute 15% of the Trefis price estimate for Intuitive Surgical's stock.


  1. ISRG Stock Split
Intuitive Surgical (NASDAQ: ISRG) approved of a three-for-one split back in August 2021 and ISRG stock traded at levels of around $330 post its split.

  1. Impact of Coronavirus Crisis On Intuitive Surgical

The 2020 coronavirus crisis has impacted the medical devices companies, including Intuitive Surgical, primarily due to a decline in the number of procedures performed, as many elective procedures were deferred in the first half of 2020. However, the number of procedures performed after dipping 19% in Q2 2020 saw a rebound in Q3 2020. For the full year 2021, procedure volume growth was 28%.

The company will likely see strong revenue growth once the Covid-19 crisis abates, led by its placement of new systems. The company was able to place 1,347 systems in 2021, reflecting a 40% y-o-y growth. Intuitive Surgical has seen strong growth in the installed base of its robotic systems, and it translates into higher demand for its instruments & accessories, thereby driving sales growth.

Also, the company is debt-free, thus it does not have any significant risk with regard to its cash flows. While there are other robotic platforms that have received the U.S. FDA approvals, so far there has been no visible threat to Intuitive Surgical’s business, and the market itself could grow exponentially over the coming years. As such, Intuitive Surgical could come out strongly from the current crisis, in our view.

  1. Q1 2022 Performance
Intuitive Surgical's top line grew 15% (y-o-y) to $1.5 billion in Q1 2022. This can be attributed to higher demand for new systems, consumables, as well as higher services revenue. The company's adjusted earnings declined 3% y-o-y to $1.13 on a per share and adjusted basis.

  1. Expansion of Procedures
The company's surgical systems have been widely adopted for select procedures, but there are still many for which they have not been adopted. The company has been focused on wider adoption of other procedures, and this has aided its top line over the recent years, a trend which is likely to continue in the near term.

  1. FDA Approvals
June 2019: The U.S. FDA clearance for da Vinci Handheld Camera.

February 2019: The U.S. FDA clearance for Ion endoluminal system, which is designed to navigate through very small lung airways to reach peripheral nodules for biopsies.

February 2019: The U.S. FDA clearance for IRISTM augmented reality product for 3D imaging of the patient anatomy.


  • da Vinci Surgical Systems' Units Sold: da Vinci Surgical Systems are computer-assisted systems that helps surgeons perform minimally invasive surgeries by controlling the device sitting at a console. With the help of this system, human error during surgeries can be minimized. Since the surgeries are minimally invasive in nature, the device helps reduce surgical complications and makes the recovery process post-surgery easier. The advantages associated with minimally invasive surgeries are likely to lure more patients to opt for such procedures over traditional open surgeries.
    Additionally, we expect the ease and benefits to surgeons to drive demand for these devices. Intuitive Surgical sold 1,347 units in 2021, and we expect that figure to increase in the coming years. However, at present these systems are expensive compared to traditional surgical instruments, and intensive training is required to master the technology. These factors somewhat work against the growth of unit sales. If Intuitive Surgical is able to increase its installed base only to 9,000, compared to over 11,000 per our estimates by the end of our forecast period, it will result in a 15% downside to our current price estimate. On the other hand, if the company manages to grow its installed base to 15,000 units, there could be a 20% upside to our current price estimate.

  • Intuitive Surgical's Instrument & Accessories Spend Per Installed Unit: Intuitive Surgical offers a number of instruments and accessories to enhance the performance of the da Vinci Systems and help to minimize human error during surgeries. Robotic surgical procedures have gained traction in the U.S. in recent years, and there have been significant increases in the number of procedures using robotic instruments conducted annually. As the number of procedures increases, we expect greater demand for instruments and accessories as greater use will result in shorter replacement cycles. Additionally, Intuitive Surgical has been expanding the scope of procedures for which its systems are accepted. Many of these additional procedures have specific accessories which improve performance, which should lead to a higher instrument and accessory spending per unit. We expect the average spend per installed unit to increase marginally over our review period, from around $490,000 in 2021 to $590,000 by the end of our review period. However, should the acceptance of da Vinci Systems, and the frequency with which they are used, grow more rapidly than we expect, the additional accessories and shorter replacement cycle could drive the average spend per unit to over $820,000 by the end of our forecast period. This would present an upside of about 20% to the Trefis price estimate.


Intuitive Surgical manufactures and sells robotic surgical systems. Its primary device is the da Vinci Surgical System, which helps surgeons perform minimally invasive surgeries through directions from a console. It delivers better postoperative results relative to traditional open surgery. The system is mostly used for prostatectomy and hysterectomy procedures. It also sells self-manufactured instruments and accessories, a set of devices that enhance the functionality of da Vinci Surgical Systems. Additionally, it offers service contracts which include system service and customer training.

Intuitive Surgical has a significant patent portfolio and currently faces little direct competition in the robotic surgery market.

Some of its potential competitors are SOFAR S.p.A., Eterne, Titan Medical, Hitachi, Olympus, Mazor Robotics.


da Vinci Surgical Systems and the accompanying Instruments and Accessories are the major sources of revenue for the company. Largely due to the following factors:

Advantages to patients

Minimally invasive surgeries through da Vinci Surgical Systems can entail fewer and smaller incisions, less blood loss, shorter hospital stays, faster recoveries and fewer scars than traditional open surgery. These relative advantages will likely lead to more patients opting for such procedures as opposed to open surgeries, which should drive demand for the company's systems.

Benefits to surgeons

da Vinci Surgical systems provide a multitude of benefits to its customers. Surgeons get a 3-D view of the entire procedure by just sitting at a console. They perform the surgery by operating the hand and foot controllers of the robotic system, which provides greater control over the surgical instruments as it is steadier than a human hand. This ease of use and improvement in outcomes is expected to drive demand from surgeons for these systems.


Geographical expansion

Intuitive Surgical is witnessing an increasing share of international sales that mainly come from Europe. This share of international revenues has increased from 20% in 2010 to 32% in 2020. The company is also expanding its operations in Japan and South Korea as the aging population and growing acceptance of robotic surgery in these countries provide significant growth opportunities.

Healthcare reforms could impact sales

Healthcare reform is leading to an expansion of the publicly insured base and may also result in lower public reimbursements. Additionally, private insurance companies have become more cautious in providing reimbursements. This could affect demand for medical devices, particularly more expensive devices such as da Vinci Surgical Systems.

Efficiency concerns

Intuitive Surgical has been marketing its da Vinci system mainly on the premise of lower costs. However, a comprehensive study conducted by Columbia University suggested that surgeries performed using this system may actually cost significantly more than standard minimally invasive procedures, and without any major benefits. Since the study became public, Intuitive Surgical has been seeing a decline in surgeries being performed through its systems. Sales could remain impacted until the company can successfully address all concerns with respect to its da Vinci system.

Expansion of procedures

The company's surgical systems have been widely adopted for select procedures, but there are still many for which they have not been adopted. The most common procedure was gynecology over the last few years, which accounted for approximately 50% of total procedures using da Vinci systems. The company believes that wider adoption of other procedures is likely. A wider range of possible procedures will likely result in greater demand for the company's systems.

Competition entry

Intuitive Surgical faces little competition in the robotic surgery market as there are significant barriers to entry and the company holds more than 1,000 patents worldwide. However, as its patents begin to expire, the cost of entering the market could decline and competition could increase. While we don't expect any competitor to challenge the company's dominant position, they could still cause some pressure on pricing and therefore margins.