9 hours ago
Where To Invest In Robotic Surgery
SS Innovations' surgical robots
An automated Grey's Anatomy? Robots have proven their worth in manufacturing assembly lines, but they also have a big future in other places, in particular surgery.
For one thing, robots promise technological exactitude—they don't shake like human hands. For another, the surgeon who directs an operation need not be physically present. Video and other tech systems allow the doctor to be hundreds of miles away, so patients needing urgent care doesn't have to wait for a specialist to travel to their bedside. Small wonder that robotic surgery's revenue is expected to double by 2029, reaching $23.7 billion, per research firm
The question in this relatively new and burgeoning field is where to place your chips so you gain the best return long-term: with the top company, Intuitive Surgical, or a scrappy underdog, such as SS Innovations. There's a good case to be made for the underdog.
Right now, robotics surgery leader Intuitive is riding on the success of its da Vinci Surgical System, which has been around for a quarter century. The company's shares have done well, almost tripling in value during the past five years, and since 2000 have soared over 50-fold.
Intuitive's future seems bright. Solid revenue and earnings growth inspire confidence, with a commendable profit margin of 28%. The company 'offers ample growth opportunities, particularly overseas,' writes Morningstar analyst Alex Morozov. 'The ultimate ceiling for robotic surgery is virtually unlimited.' As Morozov notes, 'with the latest release of the next-generation platform, Intuitive should maintain its dominance.'
Intuitive's da Vinci device uses a minimally invasive approach. It grew out of research by SRI International, with ample federal funding. Washington was drawn to the system's ability to perform long-distance surgery using robotics—a boon for battlefield medical care. As a standalone company, Intuitive first launched in Europe in 1999 and went public in the U.S. a year later.
Still, while Intuitive enjoys a dominant position, another player in the field is worth a look as a value play—with a good chance of rewarding investors even more than the established leader will going forward. After all, Intuitive is not a cheap stock: Its price/earnings ratio is 75. Intuitive commands a market cap of $183 billion, while SS Innovations weighs in at just $685 million.
SS Innovations International is a recent (founded 2019) startup that has shown encouraging growth, and joined Nasdaq in April, with its executives ringing the exchange's opening bell in early June. Its growth story is solid. To be sure, like most young companies, it is not profitable, but finances are improving. Annual revenue is up more than three times from 2023 to 2024. Cash is a reassuring 25% of total assets and long-term debt is zero.
The company's strategic position appears to be firm, as well. It touts a price advantage of its latest product, SSi Mantra 3, over Intuitive's da Vinci. In the U.S., SS Innovations' focus will be on community hospitals and ambulatory surgical centers in medically under-served areas, such as rural America.
SS Innovations is led by Dr. Sudhir Srivastava, its CEO (the SS in the business' name), and Dr. Frederic Moll, its vice chairman. Srivastava pioneered many current robotic procedures and has four decades of surgical experience. He holds 59% of the firm's shares. Moll, an American and onetime Johnson & Johnson executive, co-founded rival Intuitive. He holds approximately 10% of SS Innovation's shares.
'Our system is cheaper, more advanced and more user friendly,' Srivastava says. Plus, its remote feature is a big help for both doctors and patients, he goes on: 'I can do a surgery in Delhi with the patient in Bangalore, 2,000 miles away.'
Another area where robotic surgery promises to be a boon is to help alleviate the doctor shortage in the U.S., Moll says. After all, surgery is a high-stress profession, and some practitioners bail out of their careers early, compounding the problem. Moll argues that the ease of using his firm's system will extend surgeons working lives.
SS Innovations got its start in India, where Srivastava made his name using minimally invasive techniques. The company's SSi Mantra device is used around the world, primarily in Asia and South America. SS Innovations is next targeting the huge markets in the U.S. and Europe, and expects to receive a regulatory decision for SSi Mantra 3 from Washington in the first half of 2026.
To date, the company has performed 4,000 surgeries over a large swath of categories, which include cardiac, gynecology, urology and colorectal procedures.
Certainly, other companies offer surgical robotics. But unlike SS Innovations, these tend to be focused on specific types of ailments, such as PROCEPT BioRobotics (urinary and prostate), or are not a robotics pure play, like Medtronic (pacemakers, stents, insulin pumps). SS Innovations is all about robotic medicine, period.
In cultural terms, robots often get a bad rap. Think HAL 9000 in the sci-fi classic, 2001 Space Odyssey: It murders the crew of astronauts. More concretely and currently, a lot of anxiety exists that artificial intelligence will dump humans out of their jobs. But robotic surgery, as seen by SS Innovations' promise, highlights the benign side of robots, and presents an investment opportunity worthy of consideration.
