Buy the Post-Earnings Surge in Intuitive Surgical (ISRG) Stock?

Intuitive Surgical’s ISRG stock has been on a tear since the medical pioneer exceeded Q3 expectations on Tuesday and provided positive guidance that left investors hyped about rising demand for robotic-assisted surgical systems.  

Surging more than +15% since its Q3 report, Intuitive Surgical stock has moved into positive territory for the year and has started to rebound closer to its 52-week and all-time high of $616 a share.

Intuitive Surgical’s Strong Q3 Results

Posting Q3 sales of $2.5 billion, Intuitive Surgical’s top line increased from $2.03 billion in the comparative quarter and topped estimates of $2.41 billion. Most intriguing is that Intuitive Surgical’s revenue from instruments and accessories used in each procedure grew 22%, reflecting both higher procedure volume and increased utilization per system.

Thanks to its operational efficiency and strategic execution, Intuitive Surgical's earnings soared 30% to $2.40 per share compared to EPS of $1.84 in Q3 2024. Furthermore, this crushed Q3 EPS expectations of $1.99 by 20%.

As illustrated by the green arrows in the price performance chart above, Intuitive Surgical has surpassed earnings expectations for 11 consecutive quarters with an average EPS surprise of 16.34% in its last four quarterly reports, as shown below.

Rising Demand for Robotic-Assisted Procedures

Aiding Intuitive Surgical’s strong results and positive outlook was that the company saw a 20% increase in global surgeries using its da Vinci robotic systems. Notably, da Vinci is a cutting-edge robotic platform designed to enhance precision and control in minimally invasive surgeries, including for urology, gynecology, cardiothoracic procedures, and general surgery.

Similarly, Intuitive Surgical’s Ion endoluminal system has also increased in popularity, particularly in lung biopsy procedures. Regarding its strategic execution, Intuitive Surgical’s product adoption was also driven by higher system placements, placing 427 da Vinci systems in hospitals and surgical centers during Q3 2025, compared to 379 in the prior year quarter.  

Innovation and regulatory wins have further propelled Intuitive Surgical’s operations. To that point, FDA-cleared software upgrades are boosting its upgraded product line, especially as it relates to improvements in diagnostic capabilities.  

Intuitive Surgical’s Raised Guidance

Citing strong hospital spending and international expansion, Intuitive Surgical raised its full-year da Vinci procedure growth expectations to 17%-17.5%, up from previous forecasts of 15.5%-17%. Additionally, Intuitive Surgical raised projections for its full-year pro forma gross margin range to 67%-67.5% from 66%-67%.

Based on Zacks' estimates, Intuitive Surgical’s total sales are expected to spike 18% this year and are projected to expand another 12% in fiscal 2026 to $11.12 billion. Intuitive Surgical’s annual earnings are currently slated to rise 11% in FY25 and are projected to increase another 12% in FY26 to $9.16 per share.

Conclusion & Final Thoughts

Following the sharp post-earnings rally, Intuitive Surgical stock lands a Zacks Rank #3 (Hold). Trading at a noticeable but not overly stretched premium of 64X forward earnings, a buy rating could be on the way for ISRG if the rally doesn't get overdone from here.

Like AI, the adaptation and growth prospects for robotics are very luring to investors, and EPS revisions are likely to trend higher for Intuitive Surgical following its favorable Q3 report. This could help in normalizing a somewhat lofty valuation, with it very enticing that Intuitive Surgical has expanded its installed base to over 10,000 systems, boosting recurring revenue from instruments and accessories.

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This article originally published on Zacks Investment Research (zacks.com).

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