Intuitive Surgical (ISRG): Evaluating Valuation as Shares Trend Higher on Investor Optimism

Intuitive Surgical (ISRG) stock has been quietly trending upward over the past month, picking up around 4%. With investors keeping an eye on healthcare innovation, there is growing curiosity about its pace and sustainability.

See our latest analysis for Intuitive Surgical.

After a solid sprint over the last 90 days, with a share price return of nearly 20%, Intuitive Surgical is showing signs of renewed investor momentum. Over the past year, total shareholder return has been positive, though more modest, reflecting steady but not runaway gains as the market weighs up the company's growth potential.

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With shares hovering just under their average analyst price target and recent growth outpacing annual returns, the question remains: is Intuitive Surgical undervalued right now, or is future potential already reflected in the price?

Most Popular Narrative: 4.1% Undervalued

Compared to the most widely followed narrative's fair value, Intuitive Surgical's shares last closed at $568.48, slightly below the suggested fair value of $592.96. The market's confidence in future growth is evident, but not without questions about just how much upside remains.

Ongoing product innovation (including full launch of da Vinci 5, integrated force feedback, and digital/AI case insights), coupled with R&D to expand into adjacent specialties, enhances clinical outcomes and surgeon efficiency. This supports future procedure growth, higher system ASPs, and increased recurring instrument and accessory revenues.

Read the complete narrative.

What's fueling this ambitious fair value? Find out which bold growth projections, next-gen tech launches, and profitability targets put Intuitive Surgical in the spotlight. Click through to uncover the hidden drivers behind this calculation and see what the Street is really expecting.

Result: Fair Value of $592.96 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, including growing international budget constraints and increased competition in surgical instruments. Both factors could challenge Intuitive Surgical’s growth outlook.

Find out about the key risks to this Intuitive Surgical narrative.

Another View: High Valuation Multiples Signal Caution

Looking at the company's price-to-earnings ratio, Intuitive Surgical trades at 73.4x earnings, which is more than double the US Medical Equipment industry average of 28.2x and well above the fair ratio of 39.8x. This premium signals that investors have priced in ambitious future growth, but it raises the stakes if results do not meet expectations. Could this rich valuation become a headwind, or is the market justified in its confidence?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Intuitive Surgical Narrative

If you see things differently or want to dig into the numbers on your own, creating your own narrative is quick and straightforward. Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Intuitive Surgical.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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