Intuitive Earnings: Bariatric Pressures Dominate Discussion, but Underlying Performance Strong

Unsurprisingly, recent developments in weight loss drugs (GLP-1) and the resulting effect on weight-loss surgery dominated Intuitive Surgical's third-quarter earnings call despite bariatric procedures representing less than 5% of the total. While it is reasonable to assume that our and the market's prior expectations around bariatric penetration for robotics are too optimistic in light of the recent significant developments in weight loss therapies, this has little effect on our assumptions. We maintain our wide moat rating and $230 fair value estimate, but even with the stock pullback, shares remain in overvalued territory.