Intuitive Surgical is an Intuitive Buy

Robotic surgery systems solutions provider Intuitive Surgical NASDAQ: IRSG stock is down (-37.5%) on the year as benchmark indices slide. The provider of robotic da Vinci Surgical Systems was still able to grow revenues by 15.1%. Its fiscal Q1 2022 performance was impacted by the resurgence of the Omicron variant which impacted procedures. The COVID impact will continue to have an adverse impact on procedure volumes, but they differ by region and geography. The adverse impacts include staffing pressure at hospitals, logistics delays, and raw material availability. Despite suffering from supply chain shortages and disruption, the recovery in demand continues as the pandemic moves into the rearview mirror. The international countries continue to adopt robot-assisted surgery beyond urology procedures to include oncologic, gynecology, and general surgery. This is driving diversified utilization as one in six surgeries now involve the use of robotics. Prudent investors seeking exposure in this innovative segment can watch for opportunistic pullbacks in shares of Intuitive Surgical.

Q1 Fiscal 2022 Earnings Release

On Jan. 20, 2022, Intuitive Surgical released its fiscal first-quarter 2022 results for the quarter ending March 2022. The Company reported an earnings-per-share (EPS) profit of $1.13 excluding non-recurring items versus consensus analyst estimates for a profit of $1.08, beating estimates by $0.05. Revenues grew by 15.1% year-over-year (YoY) to $1.49 billion beating analyst estimates for $1.43 billion. Worldwide sales of da Vinci systems rose 19% YoY driven but Q1 2022 was also a period of COVID Omicron resurgence impacting procedures. The Company placed 311 Da Vinci Surgical Systems, up 4% YoY to bring its total installed base to 6,920 systems, up 13% YoY. Intuitive Surgical CEO Gary Guthart commented “Customer demand for our products was healthy in the first quarter despite a challenging global environment. We remain focused on meeting that demand with high-quality products and services while advancing our innovation programs.”

Conference Call Takeaways

Intuitive Surgical CEO Gary Guthart reiterated the ongoing impact of COVID-19 will adversely impact clients’ ability to perform surgeries for reasons spanning from staffing shortages to logistics delays. It is difficult to forecast these headwinds. The United States saw nice growth in general surgeries led by bariatric procedures, cholecystectomy, hernia repair, and rectal surgery followed by lobectomy. The UK, China, Japan, Germany, and Italy had above average growth. Japan saw an increase in reimbursements for robotically assisted gastrectomy and eight additional procedures. As more healthcare programs reimburse for these surgeries, Intuitive Surgical reaps the benefits from more orders by hospitals. Ion procedures grew by 350% in Q1, which illustrates the strengthening adoption of the platform. He stated that “Over the mid-term capital demand in mature robotic-assisted surgery segments is a function of procedure demand moderated by utilization growth.” The Company received Chinese NMPA clearance for its 60mm and 45mm SureForm staplers, Vessel Sealer Extend, and Endoscope Plus. These products are used with its Xi systems for general and thoracic surgeries. The Company submitted its EU medical device regulation application for its Ion systems to enter the European markets. Its My Intuitive app user community tripled as it is available in the U.S., Japan, Germany, France, UK, Switzerland, and Ireland with plans to launch in Italy, Spain, and India in the second quarter. The Company launched an upgraded interface that enables the da Vinci systems to auto-capture video integrating procedure annotation at key events to create convenient case-by-case video storage and review. Its virtual reality training simulator SimNow saw 33% quarterly growth. The Company continues to prioritize training and supplying clients to adopt and utilize its technology.

ISRG Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a broader view of the landscape for ISRG stock. The weekly rifle chart peaked bear the $309.69 Fibonacci (fib) level before triggering a weekly inverse pup breakdown. The weekly 5-period moving average (MA) is falling at $257.21 followed by the 15-period MA at $277.30. Shares are falling through the weekly 200-period MA at $228.12 with lower Bollinger Bands at $203.04. The weekly stochastic triggered a mini inverse pup to fall through the 20-band. The weekly market structure low (MSL) triggers a breakout above $295.26. The daily rifle chart formed an inverse pup breakdown with a falling 5-period MA at $236.78 followed by the daily 15-period MA at $236.78 followed by the daily 50-period MA at $277.71. The daily lower BBs sits at $198.53. The daily stochastic has been snuffed under the 20-band and is attempting to cross back down under the 10-band. Prudent investors can watch for opportunistic pullback levels at the $210.52, $203 fib, $196.44, $187.18 fib, $179.13 fib, $171.37 fib, and the $156.63 fib level. Upside trajectories range from the $270 fib up to the $314.02 fib level.