It's been a good week for Intuitive Surgical, Inc. (NASDAQ:ISRG) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.9% to US$521. Revenues were US$2.0b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.56 were also better than expected, beating analyst predictions by 17%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following the latest results, Intuitive Surgical's 29 analysts are now forecasting revenues of US$9.50b in 2025. This would be a major 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 6.3% to US$6.70. In the lead-up to this report, the analysts had been modelling revenues of US$9.40b and earnings per share (EPS) of US$6.59 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.8% to US$524. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Intuitive Surgical analyst has a price target of US$604 per share, while the most pessimistic values it at US$265. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Intuitive Surgical's growth to accelerate, with the forecast 16% annualised growth to the end of 2025 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Intuitive Surgical is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Intuitive Surgical going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Intuitive Surgical Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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