Intuitive Surgical: What To Watch For In Q1 2017 Earnings

Intuitive Surgical (NYSE:ISRG) will report its Q1 2017 earnings on Tuesday, April 18. We will keep a close eye on the growth in surgical procedures using da Vinci systems and expansion of the product in international markets. Intuitive Surgical’s stock has risen significantly since the beginning of 2016. There was a dip towards the end of last year following Intuitive’s third quarter earnings release, but it rallied in the first quarter of 2017, which we believe was partially driven by the company’s announced stock buyback program. Nevertheless, Q1 results should be seen as an important catalyst which can set expectations for the rest of the year. Investors seem to be expecting strong growth, and it may be challenging for Intuitive to live up to these expectations.

Our price estimate of $747 for Intuitive Surgical is slightly below the market.

Intuitive Surgical saw healthy growth in the number of procedures as well as revenue per procedure last year, on account of growth in general surgery procedures, gynecologic procedures, and urologic procedures, as well as higher volume of stapling and vessel sealing products. However, the growth in international sales, especially in China and Brazil, has been more mixed. Additionally, more instruments being placed under operating leases could impact the revenue growth in the short run. Intuitive needs to drive higher adoption of da Vinci systems in European and Asian markets, and is seeking economic validation of its da Vinci systems globally.

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