Intuitive Surgical, Inc. (ISRG)
Valuation Overview•Is Intuitive Surgical, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
High-quality fundamentals with a strong composite quality score of 88/100, backed by robust profitability and solvency.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Elite compounder with fortress-level fundamentals across every core pillar.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
ISRG exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. This is backed by a fortress balance sheet, holding significant net cash ($3.1B) and minimal debt risk.
The company is driving exceptional top-line expansion (17.4% 3Y CAGR) paired with highly explosive earnings growth (29.2% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 30.5% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $2.8B | +20.5% | +17.4% | +18.2% | +15.5% | |
| EBITDA | $855.3M | — | +23.1% | — | — | |
| Net Income | $821.5M | +23.0% | +29.3% | — | +17.1% | |
| EPS (Diluted) | $2.28 | +22.6% | +29.2% | +21.8% | +16.4% | |
| Free Cash Flow | $808.6M | +91.0% | +37.5% | +16.9% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 66.3% | 66.6% | 67.3% | 68.2% |
| Operating Margin | 30.5% | 27.4% | 27.9% | 29.5% |
| Net Margin | 28.2% | 27.1% | 26.5% | 26.6% |
| FCF Margin | 26.8% | 17.0% | 19.3% | 24.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.12 | $2.50 | +17.9% | ||
| Q1'26 | $2.27 | $2.53 | +11.5% | ||
| Q4'25 | $1.99 | $2.40 | +20.6% | ||
| Q3'25 | $1.93 | $2.19 | +13.5% | ||
| Q2'25 | $1.74 | $1.81 | +4.0% | ||
| Q1'25 | $1.76 | $2.21 | +25.6% | ||
| Q4'24 | $1.63 | $1.84 | +12.9% | ||
| Q3'24 | $1.54 | $1.78 | +15.6% |
Total return is -20.2% (1Y), lagging the benchmark by -45.1%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -27.6% | -36.9% | — |
| 1Y | -20.2% | -45.1% | — |
| 3YCAGR | +7.5% | -12.5% | — |
| 5YCAGR | +6.8% | -6.1% | — |
| 10YCAGR | +18.9% | +5.2% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Intuitive Surgical, Inc. (ISRG) valuation, health, and returns.
Intuitive Surgical, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -32.8% downside from DCF intrinsic value of $273.31)
Intuitive Surgical, Inc. has multiple valuation anchors: DCF Intrinsic Value: $273.31 | Peer Relative Fair Value: $187.02 | Wall Street Analyst Target: $597.78 (implying +47.0% upside). A convergence of these signals offers higher conviction.
Intuitive Surgical, Inc. displays excellent financial health with a composite quality score of 88/100, supported by a Altman Z-Score of 34.1 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 15.0%.
Intuitive Surgical, Inc. returns capital via buybacks instead of dividends, carrying a 1.6% buyback yield and reducing outstanding shares by +0.2% in the last 12 months.
Intuitive Surgical, Inc.'s current growth trajectory is Accelerating. The company achieved +20.5% 1Y revenue growth and +22.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +17.4%.
Wall Street consensus is Buy based on 55 analysts, beating EPS expectations in 100% of recent quarters with a 13-quarter streak. The consensus price target represents a +47.0% change from current levels.
Investment risks for Intuitive Surgical, Inc. include: -32.2% 1-year max drawdown. Volatility risk is characterized by a beta of 0.91x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.