The news from Intuitive Surgical was complicated by expectations for the company to announce a new system launch, Evercore ISI analyst Vijay Kumar said. Intuitive Surgical is well known for its da Vinci Robotic Surgery System. The company recently announced $2 billion in accelerated share repurchase agreements, fueling the speculation.
“Expectations were high for a new system launch,” Kumar said in a report. “We suspect today’s results are not enough given the current market environment. The other key question for investors will be whether Intuitive Surgical can show operating leverage in fiscal year 2023 and when we can see a potential new system being launched.”
InMode shares tanked after preliminary fourth-quarter sales slowed down from a stronger third-quarter report.
Both stock slumps came despite a fractional jump for the broader Medical-Systems/Equipment industry group. On today’s stock market, ISRG stock plunged 4.2% to close at 259.96 as INMD stock skidded 9.6%, closing at 33.17.
ISRG Stock: Strong Procedure Growth
For the fourth quarter, Intuitive Surgical preannounced $1.66 billion in sales, up 7% vs. the comparable quarter in 2021. But that was narrowly below analyst forecasts for $1.69 billion, according to FactSet.
Evercore’s Kumar blamed light da Vinci sales on a lower-than-expected sales price of $1.43 million. Recently, the systems have cost $1.5 million, he said. Total system placements came in above views from ISRG stock analysts, while placements in the U.S. were low.
The number of procedures using Intuitive Surgical’s robot grew 18% year over year, topping forecasts.
Intuitive Surgical also guided to 12%-16% procedure growth in 2023.
“The conservative guide is typical of Intuitive Surgical to start the year,” Kumar said. “Given recent trends of high teens (percentage) of growth, we suspect investors will be looking for eventual guide to raise to high teens (percentage).”
Kumar kept his in-line rating and 250 price target on ISRG stock.
InMode Beats INMD Stock Analysts’ Calls
InMode, on the other hand, topped expectations in its fourth-quarter preannouncement. But INMD stock slipped nonetheless.
The medical aesthetics company expects $133.2 million to $133.4 million in sales and for adjusted profit of 73-74 cents per share. Analysts surveyed by FactSet called for $129.7 million in sales and 65 cents in per-share earnings. Needham analyst Mike Matson noted the preliminary fourth-quarter report suggests sales grew 21% vs. 29% sales growth in the third quarter.
“The slowing growth (makes investors) worried about ability to hit guidance next year,” Matson told Investor’s Business Daily in an email.
InMode also provided its initial outlook for 2023. The company expects $525 million to $530 million in sales, up 16%-17%. That just topped INMD stock analysts’ call for $524 million.
“Given the consistent revenue beats for InMode since the company went public, we view InMode’s 2023 guidance as conservative and see potential for new products to drive additional upside during 2023,” Matson said in a note to clients.
He has a buy rating and 60 price target on InMode shares.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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