What Percentage of Intuitive Surgical’s Stock Price Can Be Attributed To Growth?

April 27th, 2016 by Trefis Team
-3.05%
Downside
366
Market
355
Trefis
ISRG: Intuitive Surgical logo
ISRG
Intuitive Surgical

Leading surgical robot maker, Intuitive Surgical’s stock price hit an all time high this month, as investors took note of the company’s strong growth prospects. In this analysis, we quantify the percentage of Intuitive’s stock that can be attributed to growth.

We know, that a stock’s valuation can be highly influenced by future expectations of earnings growth. However, in theory, if a company sees no growth opportunities it should distribute all its earnings as dividends to its shareholders. Assuming that a company pays all earnings as dividends for the rest of the period, we can calculate Present Value of Growth Opportunity (PVGO) of a stock from the formula given below:

PVGO = Current Stock Price – (Forecasted Earnings for the next period / Cost of Equity)

Percentage of growt

Notes: For more details about the calculation for Present Value of Growth Opportunity please refer this link.

1) If you like or have any questions about our analysis, please write us back at content@trefis.com. We hope such lean communication sparks thinking, and encourages you to ask questions. The purpose of these analyses is to help you focus only on a few important things. 
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Intutitive Surgical

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