Intuitive Surgical Placed 546 da Vinci Systems Last Quarter. Why Wall Street's Sell-Off Misses the Point.
Intuitive Surgical sells the da Vinci surgical robot, but that's actually not how it generates most of its revenue.
Intuitive Surgical reported a decline in its stock after announcing Q3 2026 earnings. Despite bouncing back, the stock remains 20% below its 52-week high. Investors might be overlooking the long-term story, which lies in the parts and services sold to maintain the da Vinci surgical robots. Intuitive Surgical's price-to-sales ratio is 14.5x, while its price-to-earnings ratio is 56x, indicating it's expensive.
However, when compared to its historical ratios, the stock appears cheaper. Competitors like Medtronic and Johnson & Johnson may reduce Intuitive Surgical's sales of new da Vinci systems, causing further stock declines. While growth investors should scrutinize Intuitive Surgical, long-term growth investors should consider the installed base of da Vinci systems at 12,094, up 12% year-over-year.
This growth is fueled by the 15% increase in procedures performed, even if the installed base increased by only 12%. The real business driver is the sales of parts and services, not the sale of new robots.
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