Intuitive Surgical Shareholders Reap What They Sow Amidst Da Vinci Slowdown

Intuitive Surgical's stock has plummeted 29% this year, leaving investors wondering if the market is overreacting to the company's challenges. The medical device giant's da Vinci surgical robots have seen slowing procedure growth, with a 15% increase in the latest quarter compared to 17% in the previous year. Intuitive Surgical expects full-year da Vinci procedure growth of 13.5% to 15.5%. The slowdown is partly due to the increased use of GLP-1 weight-loss drugs and subsidies for Affordable Care Act health plans expiring.

CEO David Rosa also noted that the company faces increased competition in China, as well as from deep-pocketed rivals such as Johnson & Johnson and Medtronic. However, many analysts believe that the sell-off is overdone. Of the 32 analysts surveyed by S&P Global in September, 24 rated Intuitive Surgical's stock as a 'buy' or 'strong buy.' Bernstein analyst Lee Hambright is particularly bullish on the healthcare stock, with a price target 70% above its current share price.

Despite the challenges, Intuitive Surgical's stock has historically presented great buying opportunities during periods of decline. The company estimates that around 9 million procedures are performed annually for which it already has products and regulatory clearances, and around 20 million procedures per year are good candidates for minimally invasive surgeries using robotic systems.