The company known as Intuitive Surgical ( ISRG -0.04% ) is preparing for its upcoming phase. With new products being created and the chance to enter the worldwide market with its robotic surgical systems, it appears that there is a lot of potential for growth for both the company and its investors.
However, Intuitive is just beginning to face competition from new rivals in the range of functions its system can carry out. Let’s examine the future prospects of this company’s stock to determine if it remains a worthwhile investment.
Although there are challenging circumstances ahead, they may not have a significant impact.
Intuitive’s earnings report for the second quarter, released on July 18, included a combination of positive financial outcomes and cautionary statements regarding upcoming periods. The positive aspect of the report is that the quarterly results… net income Increased by 26.7% to a total of $527 million, due to a 17% rise in the number of procedures conducted during the period with the da Vinci robotic surgical systems. A significant portion of these extra procedures were related to general surgery, which is one of Intuitive’s rapidly expanding sectors.
The worldwide installation of the company’s surgical systems increased by 14% to reach 9,203. This indicates a continued need for the company’s accessories, tools, parts, and services, which make up 83% of its regular income. The company’s strategy of expanding its systems to more hospitals and offering new training programs to existing customers is a key factor in its long-term success.
However, it does not guarantee that there won’t be some challenges in the near future.
According to management, the number of bariatric surgeries conducted using da Vinci units decreased further in the second quarter. The reason cited for this decline is the competition from weight loss medications manufactured by other companies. Novo Nordisk and Eli Lilly Currently, there is a high demand for these weight loss medications. If effective drugs can achieve similar results, the necessity for bariatric surgery may decrease significantly.
Corporate executives remain unconvinced that the negative effect of these drugs on Intuitive’s procedure volume has ended. The uncertainty of the recent period has come to an end: A new challenge has emerged and it is expected to persist for a significant period of time.
However, there are also additional challenges ahead.
The management is facing difficulties in running its operations in China and Korea due to doctors going on strike and the rise of local competitors to the da Vinci robot. While the labor strike is expected to be resolved soon, the competition from other products is now a reality that Intuitive has to deal with, especially in advanced economies in Asia.
This is a reliable investment option for the majority of portfolios.
It’s crucial to recognize that Intuitive has recently completed dealing with a challenging and disruptive period of obstacles.
Between 2020 and 2022, the company faced significant supply limitations in manufacturing due to the pandemic. Additionally, hospitals were postponing elective surgeries to preserve space for COVID-19 patients, leading to a decrease in profitability for several quarters. Despite these challenges, the company continued to increase the number of procedures performed using its surgical robots compared to the previous year, and also expanded the deployment of its systems. The company persevered through this difficult period. investigation and innovation It continued to develop new tools and equipment, as well as expanding its clientele.
Currently, Intuitive holds over $3 billion in cash, equivalents, and investments without any debt. Despite increasing competition in the future, the market for robotic surgical systems is far from reaching its maximum capacity. Additionally, Intuitive’s competitors do not pose a significant threat at this time, even in the long term.
What is the probable future for Intuitive’s stock? It is expected to remain consistent with its past performance, indicating that it will likely continue to increase in value over time, usually outperforming the overall market.
