Intuitive Surgical (ISRG) stock price forecast and earnings preview

Intuitive Surgical’s (NASDAQ: ISRG) stock price will be in the spotlight this week as the company publishes its financial results on Thursday. These results will come at a time when its recent rally has stalled. It was trading at $380 on Tuesday, lower than the year-to-date high of $404. 

Intuitive Surgical is one of the biggest companies in the robotics industry. Its product known as da Vinci is used by thousands of doctors to conduct surgeries using a minimally invasive process. 

Its performance has been doing well in the past few years as demand for its product has jumped. In this case, its total revenue rose from $4.47 billion in 2019 to over $7.1 billion in 2023.

Its growth is continuing. The most recent financial results revealed that its revenue for the fourth quarter jumped by 17% to $1.66 billion during the quarter. This growth was driven by a 22% increase in its instruments and accessories business, which generated $1.14 billion in revenues.

Its systems revenue rose to $480 million as it sold 415 da Vinci surgical systems compared with 369 in the same period in 2023. 

Therefore, the ISRG stock price will react to this week’s earnings. Data compiled by Yahoo Finance show that analysts expect that its revenue for the first quarter will be $1.81 billion, an improvement from last year’s $1.65 billion.

The company’s growth is expected to continue growing as investors anticipate its revenue reaching $1.98 billion in Q2. For the year, the average estimate is that its revenue will be $8 billion followed by $9.24 billion in 2026. 

Analysts are bullish on Intuitive Surgical because of its strong device sales and recurring revenue. It also has a strong balance sheet with over $7.34 billion in cash and equivalents. It has little debt and is benefiting from its cash balance as it generated over $92.6 million in interest income in the last quarter.

Stifel, Citigroup, Mizuho, and Barclays have recently upgraded the stock. Its average target is $414.80, higher than the current $378.55.

The ISRG shares peaked at $403.97 in March, a 123% increase from its lowest point in 2022. This rally was in line with my last prediction. It has now pulled back as some investors took profits as they wait for its financial results.

The stock has retested the crucial support level at $370, its highest swing in December last year. In most cases, a break and retest pattern is usually a bullish sign in the market. The only risk is that it has formed a double-top pattern near $403. 

Intuitive Surgical stock has remained above the 100-day moving average. Therefore, the key support and resistance levels to watch will be at $360 (July 23rd high) and $403.

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