ISRG Rides on da Vinci 5 Momentum: Can This Growth Sustain?

Intuitive Surgical ISRG delivered another quarter of standout performance, riding the wave of strong adoption of its next-generation da Vinci 5 system. The company reported third-quarter 2025 adjusted earnings per share of $2.40, which topped the consensus estimate of $1.99. Revenues surged 23% year over year to $2.51 billion, fueled by robust procedure growth and higher system placements.

Worldwide procedure volumes rose 20%, with da Vinci procedures climbing 19% and Ion lung biopsy procedures soaring 52%. U.S. utilization trends improved, reflecting the efficiency and surgeon autonomy benefits of da Vinci 5, while international markets contributed 25% procedure growth, aided by placements in Japan, Europe, and emerging geographies. The installed base of da Vinci systems increased 13% to nearly 10,800, with more than 900 da Vinci 5 systems now in the field.

However, investors’ main focus is likely to be the sustenance of this robust growth going forward. The da Vinci 5 upgrade cycle has catalyzed both demand and utilization, with nearly 90% of da Vinci 5 procedures using integrated technologies such as insufflation. Hospitals are increasingly standardizing fleets, and refurbished Xi systems are being redeployed to lower cost sites of care, expanding access.

Yet challenges remain. Management flagged ongoing declines in bariatric surgery volumes, pressured by GLP-1 adoption, and continued competitive and pricing headwinds in China. Gross margin slipped 90 basis points year over year to 68%, partly due to tariffs and product mix as well as higher facility cost. Looking into 2026, tougher comparisons and macro uncertainties could temper the pace of expansion, even as Intuitive Surgical benefits from new indications, ongoing international adoption and digital enhancements to its platforms.

For now, Intuitive Surgical’s momentum looks strong. But sustaining 20%-plus growth will depend on da Vinci 5’s global ramp and the company’s ability to offset pressures in more mature markets. Moreover, rising competition from big and small players also raises concerns related to continuation of this strong growth trend.

Competition Update

Johnson & Johnson JNJ or J&J is doubling down on its robotic surgery ambitions, with its OTTAVA soft tissue robotic system at the forefront. On its third-quarter 2025 call, J&J management confirmed plans to file for FDA de novo submission in early 2026, underscoring robotics as a top MedTech priority.

CEO Joaquin Duato reiterated J&J’s determination to be a “major player in robotics,” aligning capital allocation to fuel OTTAVA’s development. While expenses remain elevated, driven by R&D and clinical trials, management views these investments as pivotal for long-term MedTech growth. Robotics, alongside cardiovascular and vision, anchors J&J’s strategy as it exits orthopaedics to sharpen focus.

Stereotaxis STXS is making significant progress with its GenesisX robotic surgery platform, a next-generation solution designed to expand access to robotic electrophysiology procedures. In second-quarter 2025, Stereotaxis’ GenesisX secured CE Mark approval in Europe and the first commercial system was manufactured, with FDA clearance expected later this year.

Initial hospital installations are planned in Europe in 2025, followed by a full U.S. and EU launch in 2026. GenesisX is engineered to avoid costly lab construction, lowering barriers to adoption. With second-quarter operating expenses steady at $6 million, Stereotaxis plans disciplined reinvestment in salesforce expansion and catheter-driven recurring revenues to fuel commercialization.

ISRG’s Price Performance, Valuation and Estimates

Shares of ISRG have gained 5.6% in the year-to-date period compared with no change for the industry.

From a valuation standpoint, Intuitive Surgical trades at a forward price-to-earnings ratio of 58.74, above the industry average. But, it is still lower than its five-year median of 71.54. ISRG carries a Value Score of F.

The Zacks Consensus Estimate for Intuitive Surgical’s 2025 earnings implies a 17.3% rise from the year-ago period’s level.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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