Intuitive Surgical (ISRG) saw its shares plunge 6.67% on Monday, closing at $420.06—a new 52-week low. The drop came despite the da Vinci robot maker topping Wall Street expectations for first-quarter revenue and earnings, as investors weighed a U.S. Food and Drug Administration (FDA) Class I recall and softer procedure growth projections for 2026.
Q1 Results Beat Estimates, But Outlook Weighs
In April, the company reported first-quarter revenue of $2.77 billion, up 23% year-over-year, and adjusted earnings of $2.50 per share, both exceeding analyst forecasts. The company placed 431 da Vinci systems during the quarter, including 232 of the newer da Vinci 5 model. CEO Dave Rosa attributed the results to broader adoption of the da Vinci, Ion, and digital systems, according to the earnings release.
However, the company's forecast for da Vinci-assisted procedure growth in 2026—13.5% to 15.5%—is lower than the 18% growth seen in 2025. While slightly above previous guidance, the deceleration has fueled concerns among investors, as each procedure typically drives instrument and accessory sales.
FDA Class I Recall Adds Regulatory Risk
On May 5, the FDA classified Intuitive's recall of certain 8mm SureForm 30 gray reloads as Class I, the agency's most severe risk level. The recall affects devices used with da Vinci systems to cut and seal tissue and blood vessels. According to the FDA, use of the affected reloads could lead to serious injury or death. Intuitive reported four serious injuries and one fatality linked to incomplete staple lines as of February 23. The company has instructed customers to remove the products from use and switch to alternatives.
Competitive Threats Emerge
Intuitive's long-held dominance in robotic-assisted surgery is facing new challenges. Medtronic's Hugo system received FDA clearance for urologic procedures in December, marking a significant competitive entry. Medtronic executive Rajit Kamal noted that hospitals now have a choice when adding robotic programs, as reported by Reuters.
Johnson & Johnson also intensified pressure last week, announcing that its investigational OTTAVA robotic surgical system met primary safety and performance goals in a 30-patient gastric-bypass trial. While OTTAVA is not yet a commercial product, the progress gives investors another competitor to monitor.
Analyst Sentiment and Share Buyback
Despite the headwinds, some analysts remain optimistic. Leerink Partners' Mike Kratky said strong first-quarter results keep him positive on Intuitive's outlook. Nonetheless, several firms trimmed their price targets after the earnings report, citing stretched medtech valuations.
Intuitive's board authorized a $5.0 billion share buyback program as of April 30, which includes leftover amounts from previous authorizations. The company noted that repurchases could be paused or discontinued depending on market conditions.
Risks Ahead
The company has flagged tariffs, inflation, supply chain disruptions, delayed hospital budgets, and global credit conditions as potential headwinds that could weigh on performance. If procedure growth falls short of management's projections or if the recall investigation expands, the stock could face further multiple compression.
