Key Takeaways
- ISRG shares plunged over 10% to $360.50 on Friday, marking the steepest decline since April 2022
- Second-quarter EPS of $2.80 surpassed the $2.50 consensus; revenue of $2.89B topped the $2.82B forecast
- Domestic da Vinci procedure volume increased 12%, falling short of Wall Street’s 13% expectation
- Company maintained its full-year outlook, forecasting growth near the midpoint of 13.5%–15.5%
- Johnson & Johnson’s competing Ottova surgical robot aims for regulatory approval by late 2026
Intuitive Surgical delivered quarterly results that exceeded analyst expectations across the board, yet investors sent the stock tumbling. ISRG shares collapsed more than 10% to $360.50 on Friday — the sharpest single-session decline since April 2022 and the lowest closing price since January 2024, according to Dow Jones Market Data.
Intuitive Surgical, Inc., ISRG
The financial performance itself looked impressive. The company posted adjusted earnings per share of $2.80, handily beating the Street’s $2.50 target. Total revenue climbed to $2.89 billion, exceeding the anticipated $2.82 billion.
Yet the market reacted harshly. The culprit? Decelerating procedure volume.
Domestic da Vinci procedure counts expanded 12% during the second quarter, falling short of the 13% growth rate analysts had anticipated and down from the 14% increase recorded in the first quarter. On a worldwide basis, da Vinci procedures climbed 15% compared to the prior year.
Company executives attributed the slowdown to patients delaying non-urgent surgeries due to escalating insurance premiums and some opting for weight-loss medications like Ozempic instead of surgical interventions. They emphasized that medically essential procedures remained robust.
Despite exceeding expectations, Intuitive maintained its full-year guidance — anticipating global da Vinci procedure expansion near the midpoint of its 13.5% to 15.5% target range. The Street had been hoping for an upward revision following management’s guidance increase last quarter.
The company did raise its 2026 adjusted gross profit margin forecast to 68%–69% of revenue, an improvement from the previous 67.5%–68.5% projection.
What RBC Is Saying
RBC Capital Markets analyst Shagun Singh challenged the market’s negative response. She maintained an Outperform rating on ISRG with a $575 price target — modestly reduced from $600 — characterizing the Q2 performance as a “clean beat.”
Singh framed the domestic procedure deceleration as “transient rather than a structural shift in end-market demand,” projecting that postponed cases will eventually materialize. She highlighted that international demand accelerated to 20% year-over-year expansion, with robust performance throughout Europe, Asia, and additional markets.
“We remain buyers,” Singh stated.
J&J Enters the Ring
The quarterly report arrived amid intensifying competitive dynamics. Johnson & Johnson is advancing its own surgical robotic platform, the Ottova, engineered for soft-tissue operations in the upper abdominal region.
J&J expects regulatory authorization by the conclusion of 2026. This development threatens Intuitive’s commanding market dominance, though the company currently faces no approved competitor operating at comparable scale.
HCA Healthcare signaled weaker surgical procedure volumes and an uptick in uninsured patients earlier this week, providing additional industry context. Pandemic-era Affordable Care Act subsidies have now lapsed, prompting more Americans to discontinue coverage — a challenge Intuitive’s leadership recognized.
Intuitive’s revised gross margin guidance of 68%–69% for 2026 represents the company’s most recent financial projection.
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