Intuitive Surgical (ISRG): Valuation in Focus After FDA Clears AI-Powered Ion System Upgrade

Intuitive Surgical (ISRG) just got the go-ahead from the FDA for a major software upgrade to its Ion endoluminal system. The upgrade brings artificial intelligence and new imaging tools to lung biopsy procedures.

See our latest analysis for Intuitive Surgical.

Despite innovative upgrades and a leadership position in robotic-assisted surgery, Intuitive Surgical’s share price has pulled back in 2025, with a year-to-date decrease of 18.0%. However, the longer-term view remains impressive, as its three-year total shareholder return stands at a robust 134.7%. The recent FDA clearance for its Ion system highlights ongoing innovation, but a mix of analyst caution and market uncertainty is influencing near-term momentum.

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With shares under pressure despite ongoing innovation and a sizable discount to analyst price targets, investors are left to consider whether Intuitive Surgical represents a rare growth opportunity or if the current valuation already reflects its future potential.

Most Popular Narrative: 7% Overvalued

The narrative by Tokyo suggests that Intuitive Surgical’s fair value is noticeably beneath its last closing price. This hints at a mismatch between robust company performance and market enthusiasm. The assessment relies on future earnings streams and the company’s persistent, premium valuation history.

*"Based on a reasonable Free Cash Flow (FCF) outlook: 2025: $3,000 million, 2028: $4,600 million. Based on the underlaying FCF from SWS I calculated the interest rate of an investment at current stock price $484 (14.03.25). At current value I get only 1% annual return. That’s why I am still waiting for a lower price."*

Read the complete narrative.

Want the full story behind this cautious stance? With key assumptions about future growth, a fortress-like recurring revenue stream, and bold projections quietly driving this valuation, it is worth digging into what makes this number tick. The real insight is deeper than the headline.

Result: Fair Value of $400.91 (OVERVALUED)

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

However, stronger-than-expected growth in recurring revenue or a faster adoption of new robotic systems could quickly challenge this cautious valuation outlook.

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

Build Your Own Intuitive Surgical Narrative

If you see things differently or want to dive deeper into the numbers, you can build your own view in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 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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