ISRG's Single-Port Surge Meets Valuation Overhang

What happened

Intuitive Surgical reported a 91% year-over-year growth in single-port procedure volumes, driven primarily by adoption in Korea and building momentum in the U.S. as new tools and expanded indications fuel adoption. This performance aligns with the company's strategic rollout of the da Vinci 5 system and broader efforts to penetrate minimally invasive surgery markets. However, the DeepValue master report highlights that ISRG's stock trades at demanding multiples, with a P/E of ~71x and EV/EBITDA of ~69x, pricing in near-perfect execution. Key risks such as GLP-1 drug impacts on bariatric volumes, rising competition from Medtronic and J&J, and macroeconomic pressures in regions like China remain unaddressed by this growth. Thus, while the single-port surge underscores operational strength, it does little to alleviate the valuation overhang or structural challenges flagged in the filings.

Implication

Investors should view the 91% single-port procedure growth as a positive indicator of Intuitive's ability to expand into new surgical niches and drive adoption with its latest platforms. However, this growth is likely already embedded in the stock's premium valuation, which assumes sustained mid-teens procedure expansion and durable margins. The DeepValue report's potential sell rating is rooted in concerns over multiple compression if growth slows or margins erode from tariffs, competition, or GLP-1 headwinds. Critical monitoring items include quarterly procedure growth versus guidance (15.5-17%) and competitive share dynamics, as any deceleration could trigger significant downside. Ultimately, while existing holders may find comfort in this performance, new capital should remain wary given the limited margin of safety and high execution bar priced into the stock.

Thesis delta

The new article does not materially shift the DeepValue thesis of a potential sell. The single-port growth is consistent with Intuitive's growth narrative but does not mitigate core valuation concerns or risks like GLP-1 impacts and competitive pressures. Thus, the thesis remains unchanged, emphasizing that only sustained high-teens growth with stable margins could justify a re-rating, which this data alone does not guarantee.