Evercore ISI has revised the price target of Intuitive Surgical (NASDAQ: ISRG) to $550.00, down from its prior target of $580.00, yet continues to rate the leading surgical robotics firm as "In Line". This adjustment follows the release of Intuitive Surgical’s fourth-quarter financial results, which displayed notable growth but also introduced a tempered forecast for the coming fiscal year.
During the quarter, Intuitive Surgical reported pre-announced revenues of $2.87 billion, marking an impressive 19% year-over-year increase. The company’s systems revenue climbed by roughly 20%, buoyed by approximately 8% growth in system placements alongside solid average selling prices. Notably, placements of the da Vinci 5 surgical systems surpassed 300 units, reflecting a 26% rise compared to the previous quarter.
Procedure volumes expanded by 17% for the quarter, increasing to 18% when factoring in Ion procedures. Gross margins overperformed relative to expectations by about 150 basis points. Additionally, leveraging operating expenses contributed to an operating margin that exceeded forecasts by around 180 basis points. Earnings per share (EPS) totaled $2.53, representing approximately 15% growth and surpassing estimates by 11.6%.
Looking forward to fiscal year 2026, management projects procedure growth to decelerate to a range of 13-15%, down from the 19% recorded in fiscal 2025. Gross margin expectations are set between 67-68%, incorporating an anticipated tariff-related impact near 120 basis points plus or minus 10 basis points. Operating expenses are forecasted to rise between 11-15%. Interest income guidance stands at $355-375 million compared to roughly $366 million realized in fiscal 2025, while the effective tax rate is expected to increase modestly to 22-23% from approximately 21.4% in the prior year. Capital expenditures are anticipated to normalize in the upcoming year.
Amid these results, Intuitive Surgical demonstrated operational strength with its robust revenue performance and higher-than-expected profitability measures. The company's sustained growth in robotic-assisted procedures underscores its leadership in surgical technology. However, the moderated outlook for procedure growth and increased costs underline challenges ahead.