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On Wednesday, Jefferies analyst Matthew Taylor adjusted the price target for Intuitive Surgical (NASDAQ:ISRG) shares, bringing it down to $530 from the previous $582, while reaffirming a Hold rating on the stock. The adjustment comes in response to the company’s first-quarter revenue and earnings, which surpassed consensus estimates, and the anticipated impact of tariffs on gross margins. According to InvestingPro analysis, the stock appears overvalued at current levels, with a P/E ratio of 74.5x and high valuation multiples across various metrics.
Intuitive Surgical reported first-quarter revenues of $2.25 billion, marking a 19% increase and exceeding the consensus estimate of $2.19 billion. This performance aligns with the company’s strong 17.2% revenue growth over the last twelve months. Earnings per share (EPS) for the quarter were $1.81, up 21% and higher than the consensus estimate of $1.74. The company placed 147 of its da Vinci (EPA:SGEF) 5 (dV5) surgical systems during the period, which was slightly below expectations. However, Intuitive Surgical is on track for a broader launch of the dV5 system by mid-2025. InvestingPro data shows the company maintains excellent financial health with a "GREAT" overall score, supported by robust profitability metrics.
The company also provided insights into the expected financial headwinds for the year, including an approximate 170 basis point impact to gross margins due to tariffs. Additionally, capital expenditure (CAPEX) commentary was positive within the United States but presented a mixed outlook internationally due to budget constraints.
In light of these factors, Jefferies has revised its gross margin and EPS estimates downward for Intuitive Surgical. The firm’s decision to reiterate a Hold rating indicates a neutral stance on the stock’s potential performance. The new price target of $530 reflects the anticipated challenges, including the tariff impacts and international capital expenditure pressures, that the company is likely to face in the near future.
In other recent news, Intuitive Surgical reported strong financial results for the first quarter of 2025, with revenues reaching $2.25 billion, marking a 19% increase from the previous year. The company’s earnings per share (EPS) were $1.81, surpassing the forecast of $1.74. Despite these positive results, Evercore ISI adjusted its price target for Intuitive Surgical shares from $510 to $470, maintaining an In Line rating. The company’s Instruments and Accessories revenue grew by 18%, and System revenues increased by 25% year-over-year. However, system placements fell short of expectations, with a decline in the dV5 system placements compared to the previous quarter. Intuitive Surgical also updated its full-year 2025 guidance, raising its procedure growth forecast to 15-17% and adjusting gross margins downward to 65-66.5%. The company continues to focus on expanding its da Vinci surgical systems and increasing procedural volumes, especially internationally.
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