Intuitive Surgical narrowly beat Wall Street's quarterly earnings expectations, but ISRG stock toppled to an eight-month low Friday after the robotic surgery giant maintained its conservative view for 2022.
For the year, Intuitive Surgical expects procedures using its da Vinci Surgical System to rise 11%-15%. Procedure growth is a key indicator of the strength of Intuitive Surgical's business. During the fourth quarter and full year, the number of procedures using its robotic surgery systems increased 19%.
But elective procedures — like hip and knee replacements — generally decline during Covid surges. The low end of the company's guidance assumes "ongoing Covid pressure and staffing challenges, while the high end assumes no significant new surges after the current wave," UBS analyst Matthew Taylor said.
The guidance also doesn't assume any material supply chain disruptions, which Intuitive Surgical has weathered well thus far, Taylor said in a report to clients.
"Net-net, we view the higher end of procedure guidance as more likely, but we lower our estimates and price target due to lower capital placements assumed and higher spending," he said. Taylor reiterated his neutral rating on ISRG stock, but cut his price target to 317 from 338.
ISRG Stock: Covid Uncertainty Lingers
On today's stock market, ISRG stock toppled 7.9% to 269.53. Shares touched their lowest point since May.
Fourth-quarter revenue was in line with Intuitive Surgical's positive preannouncement earlier this month. Sales increased 17% to $1.55 billion, just ahead of ISRG stock analysts' projections for $1.52 billion. Adjusted profit was $1.30 per share, up roughly 9%, and beat forecasts by 2 pennies.
The company also shipped 385 of its da Vinci Surgical Systems, an increase of 18%.
Sales from one-time use instruments and accessories climbed 13% to $843 million. This was driven by growth in da Vinci procedures. Intuitive Surgical noted procedures were particularly strong for U.S. general surgery and continued growth outside the U.S.
Still, the company offered a word of warning.
"The impact of the Covid-19 pandemic on the company's business has, and continues to, differ by geography and region," Intuitive Surgical said in a news release. "Covid-19 has had, and will likely continue to have, an adverse impact on the company's procedure volumes."
ISRG stock is now trading well below its key moving averages, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
