Should You Think About Buying Intuitive Surgical, Inc. (NASDAQ:ISRG) Now?

Today we're going to take a look at the well-established Intuitive Surgical, Inc. (NASDAQ:ISRG). The company's stock saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$306 and falling to the lows of US$191. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Intuitive Surgical's current trading price of US$209 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Intuitive Surgical’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Intuitive Surgical

What is Intuitive Surgical worth?

According to my valuation model, Intuitive Surgical seems to be fairly priced at around 18% below my intrinsic value, which means if you buy Intuitive Surgical today, you’d be paying a fair price for it. And if you believe the company’s true value is $256.06, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Intuitive Surgical’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Intuitive Surgical?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Intuitive Surgical's earnings over the next few years are expected to increase by 28%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in ISRG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ISRG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 1 warning sign for Intuitive Surgical you should be aware of.

If you are no longer interested in Intuitive Surgical, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.