Intuitive Surgical (NASDAQ:ISRG) stock has seen a remarkable increase of over 27% in the past twelve months, handily beating the broader market as represented by the S&P 500 index, which grew by 9%. This upward trajectory is likely due to the company’s introduction of the da Vinci 5 platform last year, a launch that has revitalized investor sentiment, coupled with the expansion of global procedure volumes. Now that the stock has climbed to the $500 mark, the crucial question is whether it represents a buy, sell, or hold opportunity.
We find ISRG to be an appealing yet volatile stock, suggesting caution when considering a purchase at its current price of roughly $510. While we believe the fundamental outlook for ISRG is sound, contributing to its attractiveness, its high valuation renders it particularly vulnerable to adverse events. Notably, ISRG has historically commanded high valuations, a reflection of its strong sales growth. For instance, the company’s sales have grown at an average annual rate of 18% over the past four years, and we project a continued growth rate of 14% annually for the next four years.
We arrive at our conclusion by comparing the current valuation of ISRG stock with its operating performance over the recent years, as well as its current and historical financial condition. Our analysis of Intuitive Surgical along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very strong operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Intuitive Surgical’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, ISRG stock looks very expensive compared to the broader market.
- Intuitive Surgical has a price-to-sales (P/S) ratio of 24.5 vs. a figure of 3.2 for the S&P 500
- Additionally, the company’s price-to-operating income (P/EBIT) ratio is 87.0 compared to 24.3 for S&P 500
- And, it has a price-to-earnings (P/E) ratio of 84.6 vs. the benchmark’s 24.3
How have Intuitive Surgical’s revenues grown over recent years?
Intuitive Surgical’s Revenues have grown considerably over recent years.
- Intuitive Surgical has seen its top line grow at an average rate of 13.6% over the last 3 years (vs. increase of 6.3% for S&P 500)
- Its revenues have grown 17.2% from $7.1 Bil to $8.4 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
- Also, its quarterly revenues grew 25.2% to $2.4 Bil in the most recent quarter from $1.9 Bil a year ago (vs. 5.0% improvement for S&P 500)
How Profitable Is Intuitive Surgical?
Intuitive Surgical’s profit margins are much higher than most companies in the Trefis coverage universe.
Does Intuitive Surgical Look Financially Stable?
Intuitive Surgical’s balance sheet looks very strong.
- Intuitive Surgical’s Debt figure was $0 at the end of the most recent quarter, while its market capitalization is $181 Bil (as of 3/26/2025). This implies a very strong Debt-to-Equity Ratio of 0.0% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $4.0 Bil of the $19 Bil in Total Assets for Intuitive Surgical. This yields a strong Cash-to-Assets Ratio of 21.4% (vs. 14.8% for S&P 500)
How Resilient Is ISRG Stock During A Downturn?
ISRG stock has seen an impact that was slightly worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on ISRG stock? Our dashboard How Low Can Intuitive Surgical Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.
Inflation Shock (2022)
- ISRG stock fell 49.2% from a high of $360.00 on 3 January 2022 to $183.06 on 16 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 10 January 2024
- Since then, the stock has increased to a high of $610.45 on 22 January 2025 and currently trades at around $510
Covid Pandemic (2020)
- ISRG stock fell 40.5% from a high of $206.10 on 20 February 2020 to $122.58 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 17 July 2020
Global Financial Crisis (2008)
- ISRG stock fell 75.9% from a high of $39.32 on 10 April 2008 to $9.48 on 2 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 1 March 2010
Putting All The Pieces Together: What It Means For ISRG Stock
In summary, Intuitive Surgical’s performance across the parameters detailed above are as follows:
• Growth: Extremely Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Neutral
• Overall: Very Strong
Despite its premium valuation, we find ISRG stock to be an attractive pick. With ongoing expansion in global procedure volumes and the da Vinci 5 platform poised to fuel growth through both new placements and the replacement of older models, Intuitive Surgical appears well-positioned for significant gains in the future. We estimate Intuitive Surgical’s valuation at approximately $610, indicating a potential 20% upside from its current price.
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