Intuitive Surgical Stock Is Tanking. But Analysts Like the Long-Term Story.

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Surgical systems manufacturer Intuitive Surgical had a disappointing quarter because of supply chain disruptions, lower spending from hospitals, and a diminishing population of customers trading in equipment.

Intuitive Surgical stock fell almost 6% to $212.01 on Friday.

The robotic surgical systems maker on Thursday reported adjusted earnings of $1.14 per share for the second quarter, lower than analysts’ prediction of $1.20 a share, according to FactSet. Revenue of $1.52 billion was lower than expectations of $1.56 billion as well.

Intuitive Surgical

said it was difficult to match some customer orders by the end of the June quarter due to delays in semiconductor components. Meanwhile, hospitals appeared hesitant to spend on new capital equipment; only 56 trade-in transactions were made in the quarter, down from 125 in the year-ago period because existing users deferred upgrading, the company said.

Still, most analysts were bullish on the stock after Thursday’s results.

J.P. Morgan’s Robbie Marcus reiterated his Overweight rating on the stock. Although the company saw slower trends, he remains optimistic that its fourth-generation da Vinci Xi system—which he calls first and best in class—and other newer models will drive double-digit percentage sales growth over the second half of the year.

The fourth-generation da Vinci Xi robotic surgical system launched in 2014 and is known for its laser targeting and voice-assisted setup. It has longer and thinner arms.

Analysts at Raymond James and Truist also pointed to the company’s long-term growth potential and reiterated their respective Outperform and Buy ratings after the results.

Write to Karishma Vanjani at [email protected]