17. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders In Q2 2024: 67
Overweight Percentage: 0.10%
Intuitive Surgical, Inc. (NASDAQ:ISRG) is one of the biggest companies in the global medical robotics industry. The firm is known primarily because of its Da Vinci platform, which has enabled the company to capture 57% of the global market. Intuitive Surgical, Inc. (NASDAQ:ISRG) also benefits from earning stable recurring revenue akin to that enjoyed by SaaS companies. This is because after a firm has closed the sale of its expensive robots, it also provides related services to users over the course of the product’s lifetime. This is an important factor for Intuitive Surgical, Inc. (NASDAQ:ISRG)’s hypothesis since it means that the firm can earn stable revenue even during an economic downturn when budgets are tight for hospitals and others to buy expensive surgery robots. Yet, since the firm is a pure play medical robot developer, its hypothesis also solely rests on the state of the market and any potential customers threatening market share. Therefore, Intuitive Surgical, Inc. (NASDAQ:ISRG) has to continually innovate, and simultaneously balance high development costs with steady margins. On the former front, the firm launched the Da Vinci 5 robot earlier this year, with the product offering 150 design upgrades and 10,000 times the computing power over its predecessors. Looking ahead, Intuitive Surgical, Inc. (NASDAQ:ISRG) has to deliver strong profit and operating margins to generate additional tailwinds for investors.
During the Q2 2024 earnings call, Intuitive Surgical, Inc. (NASDAQ:ISRG)’s management shared key details about customer feedback for Da Vinci 5. Here is what they said:
“Just starting with some of the feedback that we’ve discussed before, you look at what customers are immediately appreciating and some of the things you would expect around ergonomics, increases in precision and vision, the head in UI, onscreen graphics and other things. And so taken together, each one of those features are leading to some efficiency gains in particular in sort of console time. And that has been kind of noticed across the customer base. And I think that’s where we’re starting — we’re hearing a little bit about what can that mean in terms of adding a procedure a day, increasing utilization of the system. And so that’s what both our surgeon customers and our executive customers are noticing as a result of their investment in da Vinci 5.
You know, some of the other features, Case Insights, Force Feedback, we’re excited to work with customers and we know that’s going to take time to develop and really quantify some of those impacts. In terms of pushback, today what we are seeing is a little bit what Jamie talked about. We are starting, customers will have to evaluate the value of da Vinci 5. We have these early adopters that are excited about what it can be. And as we move in through our measured launch, we will continue to have to underscore, and reinforce the value that it brings, and communicate that to executives and their teams.”
