Intuitive Surgical stock target cut to $470 by Evercore ISI

On Wednesday, Evercore ISI adjusted its price target for Intuitive Surgical (NASDAQ:ISRG) shares, decreasing it to $470.00 from the previous $510.00. Despite the price target reduction, the firm maintains an In Line rating for the stock. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with a current market capitalization of $171.5 billion and a P/E ratio of 74.6x. The adjustment follows Intuitive Surgical’s first-quarter 2025 financial performance, which showcased revenues of $2.25 billion, a 19% year-over-year increase, surpassing the Street’s expectations by 300 basis points.

The company’s Instruments and Accessories (I&A) revenue grew by 18%, outperforming the Street’s forecast by 210 basis points, while System revenues saw a 25% year-over-year rise, beating estimates by 690 basis points. Procedure volume expanded by approximately 17%, exceeding the Street’s projections by 250 basis points. However, system placements did not meet the Street’s expectations, falling short by approximately 970 basis points, with a quarter-over-quarter decline in the dV5 system placements (147 in Q1 versus 174 in Q4).

Intuitive Surgical’s gross margins (GMs) were reported at 66.4%, which was 40 basis points below the Street’s expectations. This was somewhat mitigated by operational expenditures (OpEx), resulting in an operating margin (OM) of 34.1%, which is 110 basis points higher than expected. The company’s earnings per share (EPS) increased by roughly 21% to $1.81, outperforming the Street by about 400 basis points. InvestingPro subscribers have access to 13+ exclusive ProTips about ISRG, including insights about its valuation multiples and profitability metrics. The company’s comprehensive Pro Research Report provides detailed analysis of its financial position and growth prospects.

Looking ahead, the company updated its full-year 2025 guidance. The procedure growth forecast was raised by 150 basis points to a midpoint range of 15-17%, up from the previously projected 13-16%. Gross margins were adjusted downward by 170 basis points to a new range of 65-66.5%, compared to the earlier 67-68% estimate. Operational expenses are expected to increase by 10-14%, slightly narrowed from the prior 10-15% range. Stock-based compensation (SBC) expenses are anticipated to be between $770 million and $790 million, a slight increase from the prior range of $760 million to $790 million. Other income projections remain unchanged at $370 million to $400 million, and the tax rate is still expected to be between 22% and 23%. Capital expenditures (Capex) are projected to be slightly lower, ranging from $650 million to $750 million, compared to the previous estimate of $650 million to $800 million.

In other recent news, Intuitive Surgical reported robust financial results for the first quarter of 2025, surpassing both earnings and revenue expectations. The company achieved earnings per share of $1.81, exceeding the forecast of $1.74, and generated $2.25 billion in revenue, surpassing the anticipated $2.19 billion. This represents a 19% year-over-year increase in revenue. Despite these positive results, the company’s stock experienced a slight decline in after-hours trading. Intuitive Surgical’s strategic focus remains on expanding its da Vinci (EPA:SGEF) surgical systems and increasing procedural volumes, with notable growth in international markets. Analysts have highlighted the company’s successful rollout of the da Vinci V platform and its strong international demand, particularly in overseas procedures, which grew by 24%. The company’s financial outlook for 2025 includes an updated procedure growth forecast of 15-17% and anticipated gross margins between 65% and 66.5%. In terms of analyst activity, Bank of America Securities and Wells Fargo (NYSE:WFC) have been actively engaged, with discussions focusing on the impact of tariffs and the company’s ability to navigate the current trade environment.

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