Baron Fifth Avenue Growth Fund on Intuitive Surgical, Inc.
Thesis
The Fund believes the weakness in Intuitive Surgical shares reflects temporary concerns rather than deterioration in the company's long-term opportunity. Investors reacted negatively to weaker-than-expected U.S. system placements and concerns that health-care utilization could slow. Despite these issues, the Fund believes Intuitive can continue growing revenue at a mid-teens rate for many years. It therefore remains positive on the company's long-term growth outlook.
“we believe Intuitive can continue to grow revenue at a mid-teens rate for many years”
Key risks
- U.S. robotic surgical system placements could remain below investor expectations.
- Health-care utilization could decelerate following the expiration of Affordable Care Act subsidies.
- Medicaid work requirements expected in 2027 could weigh on utilization.