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ISRG – Market expectations are for Uniform ROA to rebound, but management may have concerns about placements growth, surgery opportunities, and procedure backlog

May 25, 2021

  • Intuitive Surgical, Inc. (ISRG:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 57.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about ION system placements growth, thoracic surgery opportunities, and procedure backlogs
  • Specifically, management may lack confidence in their ability to sustain increases in net income and ION system placements growth. Moreover, management may have concerns about the pace of extended use instrument adoption and the potential of their InTouch agreement and single-port opportunities in thoracic surgery. In addition, they may lack confidence in their ability to capitalize on long-term opportunities in China and improve instrument and accessory revenue. Finally, management may be concerned about procedure backlog accumulation and the impact of the pandemic on their France and Germany performance