The Surgical Robotics Revolution Isn't Slowing Down Any Time Soon, Says RBC Analyst

According to Brandon Henry of RBC Capital Markets, U.S. robotic general surgery volumes are likely to be higher sequentially in the third quarter. The analyst noted that 93 percent of U.S. robotic general surgeons he surveyed expect their third-quarter robotic volumes to be flat or up sequentially – a finding that is consistent with checks at the American College of Surgeons annual meeting.

Henry continued that his survey and checks bode well for Intuitive Surgical, as the company should show an approximate 2 percent sequential growth and 35 percent year-over-year growth in its U.S. general surgery procedures, despite its da Vinci Xi remaining in early product cycle. The analyst added that the surgeons he surveyed expect the number of Xi systems within their areas of practice to increase by 50 percent over the next 12 months. Moreover, the majority of robotic surgeons are "quite satisfied" with Intuitive Surgical's robotics offerings.

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Upcoming Results

Intuitive Surgical is scheduled to report its third-quarter results on Tuesday, October 20, after market close. The analyst is modeling 121 worldwide da Vinci system placements and an approximate 14 percent worldwide procedure growth, as the entire sector benefited from "stable worldwide hospital capital spending trends."

A Look Ahead

Looking forward to 2016, Henry's survey indicated that surgeons are expecting their robotic general surgery procedures to grow approximately 35 percent year-over-year – a figure that is "slightly above" the analyst's own estimate for Intuitive Surgical of 30 percent, which offers confidence the company can achieve at least his growth targets.

Shares of Intuitive Surgical remain Sector Perform rated with an unchanged $565 price target.

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