On Friday, Bernstein analysts affirmed their positive stance on Intuitive Surgical shares (NASDAQ:ISRG), reiterating an Outperform rating and a price target of $700.00. The endorsement follows a remarkable fourth-quarter earnings per share (EPS) report, which showed a 38% year-over-year increase to $2.21, surpassing the consensus estimate by 22%. According to InvestingPro data, the stock is trading near its 52-week high of $616, with a notably high P/E ratio of 95.85, suggesting investors are pricing in significant growth expectations.
Intuitive Surgical's financial performance in the last quarter was notably strong, with a gross margin of 69.5% and an operating margin of 38.4%. These figures reflect a solid year-end closing, with annual margins reported at 69.1% and 36.7%, respectively. The company's robust margin profile contributed to the impressive quarterly results. InvestingPro analysis reveals an excellent financial health score of 3.2 (rated as GREAT), with strong returns on equity of 16% and healthy revenue growth of 14.83% over the last twelve months.
The analysts highlighted the company's conservative profit and loss (P&L) guidance for the year 2025, suggesting that it provides a favorable setting for a potential beat-and-raise scenario throughout the year. They anticipate that Intuitive Surgical's financial metrics will consistently improve over the course of the year.
Intuitive Surgical's growth prospects are underpinned by what Bernstein analysts believe are five transformational product cycles poised to accelerate in the near future. This positions the company as a leading long-term growth story within the healthcare sector. The analysts' optimistic scenario suggests that Intuitive Surgical's EPS could reach $11.50 by 2026, which implies a 30% upside in the stock over the next 12 months, even if the valuation multiple declines slightly.
Investors considering the long-term outlook for Intuitive Surgical may find the analysts' perspective compelling, as they underscore the company's potential to exceed expectations and continue its growth trajectory in the coming years.
In other recent news, Intuitive Surgical has been the focus of several analyst upgrades following robust fourth-quarter earnings that surpassed expectations. Truist Securities increased its price target from $640 to $666, maintaining a Buy rating on the stock. Deutsche Bank (ETR:DBKGn) analysts also raised their target from $505 to $585, while BTIG set a new target of $622. Raymond (NSE:RYMD) James lifted its target to $688, and Citi raised its target to $711, both maintaining positive ratings on the stock.
These upgrades follow the company's recent earnings report, highlighting a revenue beat and strong growth in gross margins. Despite predicted headwinds, including a forecasted impact on currency exchange revenue and a higher tax rate, analysts remain optimistic about Intuitive Surgical's growth prospects. The company's robust revenue growth, impressive financial health score, and anticipated launch of the new D5 system are contributing factors to this optimism.
Furthermore, Intuitive Surgical's strong position in the growing robotic surgery market is underscored by the upcoming full launch of its D5 system, which is expected to drive further revenue and profit growth. However, the company faces potential challenges such as geopolitical risks, margin pressures, and ongoing litigation. Despite these factors, the recent analyst upgrades reflect confidence in the company's market position and growth trajectory. These are the recent developments in the company's journey.
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