Intuitive Surgical, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Investors in Intuitive Surgical, Inc. (NASDAQ:ISRG) had a good week, as its shares rose 2.4% to close at US$455 following the release of its quarterly results. Revenues were US$2.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.46 were also better than expected, beating analyst predictions by 16%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Intuitive Surgical
Taking into account the latest results, the most recent consensus for Intuitive Surgical from 28 analysts is for revenues of US$8.08b in 2024. If met, it would imply an okay 6.7% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 4.1% to US$5.66 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$8.03b and earnings per share (EPS) of US$5.47 in 2024. So the consensus seems to have become somewhat more optimistic on Intuitive Surgical's earnings potential following these results.
The consensus price target rose 6.1% to US$459, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Intuitive Surgical at US$525 per share, while the most bearish prices it at US$253. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Intuitive Surgical'shistorical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 13% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.3% annually. So it's pretty clear that Intuitive Surgical is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Intuitive Surgical following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Intuitive Surgical going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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