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The Intuitive Surgical (Nasdaq: ISRG) stock price is hovering near its all-time highest point on record as investors focus on its upcoming quarterly earnings. It has soared by 30% this year and by over 735% in the past decade, making it one of the most successful medical device companies in Wall Street.

Quality company with strong growth

Intuitive Surgical is a medical company that most Americans have never heard about but one that most surgeons and doctors know well.

The company manufactures a complex equipment known as da Vinci, which is used in most American hospitals. The device helps surgeons conduct complex surgeries using a minimally invasive surgeries when seated at an ergonomic console.

Da Vinci is not a cheap equipment, which explains why it is not available in many small hospitals. A unit is said to cost between $1 million and $2.5 million. 

After buying or leasing, customers will need to buy more surgical instruments and accessories from Intuitive Surgical. This model gives it regular and recurring revenue. According to its annual report, Intuitive Surgical earns between $700 and $3,600 for each surgical procedure.

Intuitive Surgical’s business has been growing in the past few years. Its annual revenue has soared from over $4.47 billion in 2019 to over $7.12 billion in 2023. Its profits have also jumped from $1.38 billion to $2 billion in the same period. 

Intuitive Surgical’s earnings ahead

The next important catalyst for the ISRG stock price will be Thursday’s quarterly earnings. Analysts polled by Reuters expect the company’s revenue to come in at $1.97 billion, a 13.4% increase from the $1.7 billion it made last year. The highest estimate is for its revenue to come in at $2.03 billion. 

Analysts also expect its forward guidance to show that its annual revenue rose to $8.03 billion, a 12.6% increase from 2023. Its revenue in 2024 is expected to come in at $9.3 billion. A strong report will likely push its stock higher.

In its first quarter results, Intuitive Surgical said that its product revenue rose to $1.57 billion while its service figure rose to $313 million. 

Is ISRG a good investment?

A case for investing in Intuitive Surgical can be made since the company has demonstrated many years of revenue growth as demand for its equipment has risen. The company also has reliable recurring revenues. 

However, a key concern for Intuitive Surgical is that its stock is highly overvalued. The company has a forward PE ratio of 79, higher than the industry median of 28. It also has a forward EV to EBITDA ratio of 48.5, higher than the industry’s median of 13.6.

These numbers mean that the company is severely overvalued since its growth is slowing. In contrast, Nvidia has a forward PE ratio of 49 and has a forward revenue growth of 81%.Similarly, Microsoft, which has a strong revenue growth, has a forward PE ratio of 38. 

ISRG stock price forecast

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Turning to the weekly chart, we see that the Intuitive Surgical share price has been in a strong bull run in the past few months.

Notably, the stock has remained above the key resistance point at $370, its highest point in November 2021. 

It has also been forming a rising wedge pattern that is shown in green. In most cases, this is one of the most popular bearish signs in the market. This pattern is now nearing its confluence level.

Therefore, the ISRG share price will likely have a bearish breakout in the coming days as sellers target the key support at $400. 

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