Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Intuitive Surgical Answers Short-Term Doubts About Procedure Volume

Surgical robot company Intuitive Surgical (NASDAQ:ISRG) has a habit of answering its skeptics. While investors fretted last quarter over slowing procedure growth, the company rebounded well this time and delivered a solid quarter almost across the board. Intuitive Surgical has never been a cheap stock, and today's valuation still assumes an aggressive adoption curve, but momentum seems to be back in this name.

Strong Results Almost Down The Line

Intuitive Surgical needed a strong quarter to rally the troops, and management delivered. Revenue rose 23% this quarter, as system revenue increased 18%, instrument revenue grew 29%, and service revenue rose 20%.

Profitability and margins were not perfect, but were still quite strong on balance. Gross margin declined about...

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