Title: Breaking Down ISRG's Stock Performance
Intuitive Surgical's (NASDAQ: ISRG) shares soared by 8% on January 15, 2023, following the company's announcement of impressive Q4 preliminary sales. ISRG is anticipating a $2.4 billion Q4 revenue, marking a noteworthy 25% year-on-year increase. This surpasses the consensus estimates of a 14% year-on-year rise to $2.2 billion. Additionally, the overall procedure volume climbed by 18% in Q4.
The stellar performance in Q4 can be traced back to ISRG's new system - da Vinci 5, launched the previous year. Among the 493 systems placed in Q4, 174 were da Vinci 5 units. Furthermore, ISRG forecasts that the total procedure volume will grow between 13% and 16% through 2025.
This impressive growth piqued investor interest, evident in the stock's continuous ascendance. Since the start of 2024, ISRG's share price has surged by 72%, outperforming its peers and market indices. However, analyzing a longer timeframe reveals that ISRG's stock growth has not maintained a consistent trend, with annual returns exhibiting significant volatility contrary to the more stable S&P 500.
Returning to 2021, ISRG saw a 32% increase, followed by a -26% decline in 2022, a 27% rebound in 2023, and an impressive 55% rise in 2024. In contrast, the Trefis "High Quality Portfolio," a collection of 30 stocks, has shown less volatility over the same period, generously outperforming the S&P 500.
This highlights the question: will ISRG continue to outperform the S&P 500, or will it face the same challenges faced in 2022? Inflated valuation multiples seem justified considering the robust growth in procedure volume and ISRG's impressive sales, as noted in our analysis "Is ISRG Stock Worth $5000?"
The current ISRG share price of $580 means that it trades at 25x trailing revenues, which is higher than the stock's typical average P/S ratio of 20x over the past five years. Historically, ISRG has proven resilient and recovered well from setbacks, so its capacity to outperform the S&P 500 remains feasible.
Intuitive Surgical's peers' performance is also worth exploring. By visiting "Peer Comparisons," users can discover comparative analyses across various industries.
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The analyst's report titled "Is ISRG Stock Worth $5000?" justifies the higher than average valuation multiples for ISRG, given its robust growth in procedure volume and impressive sales revenue. This valuation for ISRG, as of current, is 25x trailing revenues, higher than its typical average P/S ratio of 20x over the past five years.
The impressive Q4 revenue forecast of $2.4 billion by ISRG, indicating a 25% year-on-year increase, has significantly contributed to ISRG's valuation, as per recent analyses.
