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On Wednesday, Stifel analysts maintained their Buy rating and $670.00 price target for Intuitive Surgical (NASDAQ:ISRG), citing strong first-quarter procedure growth as a significant indicator of the company’s performance. According to InvestingPro data, the stock currently trades at $501.34, with analyst targets ranging from $350 to $700. The company’s current valuation appears stretched based on InvestingPro’s Fair Value analysis. Despite concerns about tariff-related impacts on gross margins, the analysts highlighted the 17% procedure growth rate, which was adjusted to 18.5% when accounting for selling days, as a key metric from the first quarter of 2025. This growth aligns with the company’s impressive revenue growth of 17.24% over the last twelve months, maintaining a healthy gross margin of 67.46%.
Intuitive Surgical’s recent report indicated an increase in the company’s procedure growth guidance for the year 2025, raising it to a range of 15-17%, up from the previous forecast of 13-16%. This adjustment reflects the robust growth in procedures observed in the first quarter. However, the company also noted an expected negative impact of approximately 170 basis points on the 2025 gross margin due to tariffs, with a potential variation of plus or minus 30 basis points. The impact is anticipated to worsen as the year progresses.
In response to these projections, Stifel analysts have updated their own forecasts to take into account the anticipated tariff impact as well as Intuitive Surgical’s revised gross margin guidance, which now stands at 65%-66.5% for 2025, compared to the earlier estimate of 67%-68%. Despite the after-hours trading pressure on Intuitive Surgical’s stock, analysts believe that investors will find positive aspects to focus on upon reviewing the company’s first-quarter results and key performance metrics more closely.
The analysts underscored the importance of system placements, which drive future procedures, revenue growth, and potential margin expansion. They consider the first-quarter procedure growth to be an encouraging sign for the start of the year. The Stifel team’s continued positive stance on Intuitive Surgical is based on these fundamental growth drivers, despite the near-term margin pressures anticipated from tariffs. InvestingPro analysis reveals the company maintains an excellent financial health score of 3.09 (rated as "GREAT"), with strong profitability metrics and minimal debt. For deeper insights into Intuitive Surgical’s financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, check out the full Pro Research Report available on InvestingPro.
In other recent news, Intuitive Surgical’s first-quarter earnings exceeded expectations, showcasing strong revenue and earnings per share due to increased procedure volumes. RBC Capital Markets, Truist Securities, Piper Sandler, Raymond (NSE:RYMD) James, and Bernstein all adjusted their price targets for the company, reflecting various assessments of its future performance. RBC Capital lowered its target to $605 while maintaining an Outperform rating, citing manageable tariff impacts. Truist Securities set a target of $590, keeping a Buy rating, and noted the positive earnings results despite tariff concerns. Piper Sandler reduced its target to $575, maintaining an Overweight rating, and highlighted the company’s robust growth prospects despite tariff challenges.
Raymond James adjusted its target to $592, emphasizing the company’s effective cost management and industry-leading growth potential. Bernstein lowered its target to $675, reiterating an Outperform rating and expressing optimism about the company’s innovative product cycles. Intuitive Surgical’s management has projected a 15-17% year-over-year increase in procedure volume by 2025, supported by the upcoming launch of the dV5 system. Analysts have acknowledged the potential short-term margin pressures due to tariffs but remain confident in the company’s long-term growth trajectory. These developments reflect a consensus among analysts that, despite challenges, Intuitive Surgical is well-positioned for continued success.
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