Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>On March 14, <a href="https://www.smartkarma.com/entities/intuitive-surgical-inc" target="_blank" data-smartkarma-citation="entities:15853:1" rel="noopener">Intuitive Surgical (ISRG US)</a> received FDA approval for its fifth-generation multiport robotic system, da Vinci 5. The device will deliver meaningful improvements in surgery.</li>
<li>The company reported strong 4Q23 result, with revenue and EPS beating consensus. 2023 procedure growth of 22% matched the higher end of the company’s guidance range of 21–22%. </li>
<li>Management has guided for a worldwide da Vinci procedure volume growth of 13–16% YoY in 2024. In the medium-term, ISRG aims to improve gross margin to above 70% level.</li>
</ul>


On March 14, Intuitive Surgical (ISRG US) received FDA approval for its fifth-generation multiport robotic system, da Vinci 5. The device will deliver meaningful improvements in surgery.
The company reported strong 4Q23 result, with revenue and EPS beating consensus. 2023 procedure growth of 22% matched the higher end of the company’s guidance range of 21–22%. 
Management has guided for a worldwide da Vinci procedure volume growth of 13–16% YoY in 2024. In the medium-term, ISRG aims to improve gross margin to above 70% level.


Intuitive Surgical (ISRG US): Fifth-Generation Device Approval Adds to Secular Growth Story

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Intuitive Surgical enjoyed a strong 2023, seeing increasing use of its platforms in hospitals and improvement in system capacity to manage growth.</li><li>Full year growth for procedures was 22%, led by general surgery in the US and diverse growth in international markets such as Germany, France, the UK, and Ireland.</li><li>However, there was a slowdown in growth across bariatric procedures due to the use of GLP-1 drugs for obesity.</li></ul>

Intuitive Surgical enjoyed a strong 2023, seeing increasing use of its platforms in hospitals and improvement in system capacity to manage growth.Full year growth for procedures was 22%, led by general surgery in the US and diverse growth in international markets such as Germany, France, the UK, and Ireland.However, there was a slowdown in growth across bariatric procedures due to the use of GLP-1 drugs for obesity.

Intuitive Surgical: Are They Capitalizing Enough On The Expanded Adoption Of Robotic Surgery? - Major Drivers

<ul><li>Intuitive Surgical, Inc. delivered mixed results for the previous quarter, with revenues below the analyst consensus.</li><li>Procedure growth for da Vinci saw a remarkable 19% increase during the quarter.</li><li>System utilization growth remained strong at 6%, down from 9% in the previous quarter but still exceeding historical growth rates.</li></ul>

Intuitive Surgical, Inc. delivered mixed results for the previous quarter, with revenues below the analyst consensus.Procedure growth for da Vinci saw a remarkable 19% increase during the quarter.System utilization growth remained strong at 6%, down from 9% in the previous quarter but still exceeding historical growth rates.

Intuitive Surgical Inc.: Next-Gen Robotics Might Just Rewrite Medical History! - Major Drivers

<ul>
<li>In 3Q23, <a href="https://www.smartkarma.com/entities/intuitive-surgical-inc" target="_blank" data-smartkarma-citation="entities:15853:1" rel="noopener">Intuitive Surgical (ISRG US)</a> recorded 12% YoY revenue growth to $1.74B, driven by growth in da Vinci procedure volume and an increase in the installed base of systems.</li>
<li>3Q23 procedure growth was 19%, versus 20% in 3Q22 and 22% in 2Q23. Systems revenue declined 11%, due to higher number of systems placed under lease and lower China demand.</li>
<li>The company now expects 2023 procedure volume growth of 21–22%, up from previous estimates of 20–22%. Significant material supply chain disruptions or hospital capacity constraints are not expected.</li>
</ul>


In 3Q23, Intuitive Surgical (ISRG US) recorded 12% YoY revenue growth to $1.74B, driven by growth in da Vinci procedure volume and an increase in the installed base of systems.
3Q23 procedure growth was 19%, versus 20% in 3Q22 and 22% in 2Q23. Systems revenue declined 11%, due to higher number of systems placed under lease and lower China demand.
The company now expects 2023 procedure volume growth of 21–22%, up from previous estimates of 20–22%. Significant material supply chain disruptions or hospital capacity constraints are not expected.


Intuitive Surgical (ISRG US): Mixed Q3 Result; Encouraging Procedure Growth Is the Key Positive

<ul>
<li>
<a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> reported Q2FY24 revenue of $8B, representing 5% organic growth, topping guidance of 4.0–4.5%. Cardiovascular, neuroscience, and medical surgical grew mid-single-digit with diabetes accelerating to high-single-digit.</li>
<li>The company now expects FY24 organic revenue growth of 4.75% versus the prior 4.5%. Medtronic raised FY24 adjusted EPS guidance to $5.13–5.19 from $5.08–5.16 earlier.</li>
<li>In November, the company has received FDA approval for innovative renal denervation device for the treatment of hypertension, which should open a multi-billion-dollar market opportunity.</li>
</ul>



Medtronic Plc (MDT US) reported Q2FY24 revenue of $8B, representing 5% organic growth, topping guidance of 4.0–4.5%. Cardiovascular, neuroscience, and medical surgical grew mid-single-digit with diabetes accelerating to high-single-digit.
The company now expects FY24 organic revenue growth of 4.75% versus the prior 4.5%. Medtronic raised FY24 adjusted EPS guidance to $5.13–5.19 from $5.08–5.16 earlier.
In November, the company has received FDA approval for innovative renal denervation device for the treatment of hypertension, which should open a multi-billion-dollar market opportunity.


Medtronic (MDT US): Beat-And-Raise Q2; Weight Loss Drugs Not to Impact Growth; New Device Approval

United States

Intuitive Surgical, Inc. design, manufactures, and markets surgical systems. The Company offers endoscopes, endoscopic retractors and disectors, scissors, scalpels, forceps, needle holders, electrocautery, ultrasonic cutters, and accessories during surgical procedures. Intuitive Surgical operates worldwide.

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Intuitive Surgical (ISRG US)