Key Points

Intuitive Surgical posted double-digit revenue and earnings growth in the first quarter.
The stock has declined more than 30 percent year to date.
The firm is experiencing strong adoption of its da Vinci 5 robotic surgical platform.
10 stocks we like better than Intuitive Surgical

Intuitive Surgical (NASDAQ: ISRG) plans to release earnings after market close on July 16. The robotic healthcare shares have declined roughly 30 percent this year even after a solid first-quarter report.

Placing a trade or investment just before earnings always involves some event risk, yet the current setup for Intuitive Surgical offers an attractive bull case.

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The shares have a recent track record of beating estimates, topping analyst forecasts in each of the last four quarters. Should Intuitive exceed current projections of 2.81 billion dollars in revenue and 2.48 dollars in EPS the stock could rise. Still investors should consider the longer-term outlook when evaluating a position.

Here are three reasons Intuitive Surgical stock represents a solid long-term purchase:

Image source: Getty Images.

The valuation appears attractive at present

Although Intuitive has historically traded at a premium multiple because of its leadership in robotic surgery the recent sell-off has lowered its forward price-to-earnings ratio to roughly 36 times. That level sits well below the five-year average of more than 58 times forward earnings. The lower multiple creates an appealing entry for a business that generates more than 80 percent of revenue from recurring sources such as instruments accessories and services.

In the first quarter recurring revenue from instruments and services rose 23 percent year over year to 2.12 billion dollars. Growth in instruments and accessories stemmed mainly from about 16 percent higher da Vinci procedure volume shifts in customer ordering patterns and roughly 39 percent growth in Ion procedure volume.

After a hospital installs a system it tends to remain within the Intuitive ecosystem generating a steady reliable revenue stream.

Revenue and EPS both increased by double digits in the first quarter with revenue reaching 2.77 billion dollars up 23 percent from a year earlier and EPS of 2.28 up nearly 19 percent over the same period.

Some investors remain cautious because GLP-1 obesity medications are reducing bariatric procedure volumes. Intuitive is offsetting that trend through growth in other procedures performed with its platforms. Another concern involves the company extending instrument lifespan to reduce hospital expenses yet this approach can strengthen customer loyalty and widen the competitive moat.

da Vinci 5 system shows solid adoption

The main near-term catalyst remains the rollout of the next-generation da Vinci 5 system. Early data indicate hospital utilization of the da Vinci 5 runs about 11 percent higher than the prior Xi platform. Because adoption has exceeded expectations the faster trade-in and upgrade cycle could produce an upside surprise in system placements and future guidance.

First-quarter 2026 da Vinci system placements included 232 da Vinci 5 units versus 147 in the first quarter of 2025.

The da Vinci 5 launch brings hardware-enabled artificial intelligence and Force Feedback technology giving surgeons a physical sense of resistance and tissue pressure for the first time. Beyond the near-term upgrade cycle this sets the technology foundation for the next decade of surgery and raises a significant barrier for newer competitors.

Growth in diagnostics and soft tissue procedures

For years the company concentrated on disease treatment through general surgery with the da Vinci platform. Through its Ion platform it is now expanding upstream to capture diagnosis and early intervention as well.

The key element of this diagnostic push is the Ion endoluminal system a robotic bronchoscopy platform for minimally invasive lung biopsies. Ion employs an ultrathin highly flexible robotic catheter.

Ion supports Intuitive high-margin recurring revenue model. Each procedure uses single-use flexible needles vision probes and patient-specific 3D planning software. In addition Intuitive is incorporating adjunctive diagnostic tools such as endobronchial ultrasound directly into the Ion workflow to boost revenue per procedure.

Intuitive is also strengthening its position in soft tissue treatment via the da Vinci SP Single Port platform. While the da Vinci 5 uses multiple small incisions the SP platform enables an entire surgical team of camera and instruments to enter through one 2.5-centimeter incision or a natural opening. The SP platform is gaining momentum in urology and transoral otolaryngology driving high-volume procedure growth.

Thus Intuitive Surgical appears undervalued heading into the second-quarter report. For investors with a multi-year horizon the outlook looks positive.

Should investors purchase Intuitive Surgical shares today?

Before purchasing Intuitive Surgical shares consider the following:

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James Halley holds no position in any of the stocks mentioned. The Motley Fool maintains positions in and recommends Intuitive Surgical. The Motley Fool recommends the following options: long January 2028 520 calls on Intuitive Surgical and short January 2028 530 calls on Intuitive Surgical. The Motley Fool maintains a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq Inc.