Here’s Why Intuitive Surgical Stock Remains A Great Pick Despite Its Recent Surge
Intuitive Surgical stock (NASDAQ: ISRG) saw an impressive 17% surge in extended trading on Tuesday, October 21, 2025, following its solid beat on Q3 results that exceeded investor expectations across all key metrics. The medical robotics pioneer not only delivered strong quarterly numbers but also raised its full-year guidance, signaling continued momentum in the robotic surgery market. We examine ISRG’s recent quarterly performance and evaluate the stock’s valuation following this significant surge in the sections below.
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Exceptional Q3 Performance Drives Growth
ISRG’s Q3 numbers were impressive. The company delivered revenue of $2.51 billion, marking a robust 23% increase compared to $2.04 billion in the third quarter of 2024. Non-GAAP earnings per share reached $2.40, significantly beating analyst estimates of $1.99 and representing a 30% jump from $1.84 in the prior-year quarter.
What’s fueling this growth? The primary driver remains strong procedure volume, with worldwide procedures using da Vinci and Ion systems combined growing approximately 20% year-over-year. Da Vinci procedures increased 19%, while Ion procedures surged an impressive 52%. Looking ahead, management raised its full-year da Vinci procedure growth guidance to 17-17.5%, surpassing analyst expectations of 16.4%.
Valuation Appears Reasonable Despite Recent Move
Is ISRG stock overvalued after this surge? We don’t think so. Currently, ISRG stock trades at approximately 71 times its reported earnings for the trailing twelve months, which is actually below the last four-year average of 75 times. Even when examining adjusted earnings, the P/E ratio largely aligns with its historical average when accounting for the recent move. However, with the company projecting superior growth rates, investors may justifiably consider paying a higher multiple than ISRG’s historical average, potentially resulting in further upside for the stock.
Potential Risks Could Dampen Growth Trajectory
Could we be wrong in our bullish assessment? ISRG stock has historically demonstrated vulnerability during market downturns, often experiencing more severe declines than the benchmark S&P 500 index. During the inflation shock of 2022, ISRG stock fell 50% from a high of $365 on November 8, 2021, to $183 on October 14, 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500. Similarly, during the COVID pandemic in 2020, ISRG stock dropped 40.5% from a high of $206 on February 20, 2020, to $123 on March 23, 2020, versus a 33.9% decline for the S&P 500. These historical patterns suggest that ISRG’s premium valuation makes it particularly susceptible to broader market volatility and economic uncertainty.
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The Bottom Line
The company’s ability to consistently beat expectations while raising guidance demonstrates the strength of its competitive moat in robotic surgery. With da Vinci 5 system adoption accelerating and the Ion platform gaining traction, ISRG appears well-positioned to capitalize on the ongoing shift toward minimally invasive procedures. While the stock’s premium valuation requires sustained execution, the combination of strong procedure growth, expanding market opportunity, and proven operational excellence suggests that ISRG remains an attractive long-term investment despite the recent surge. Also, look at our earlier analysis on the 10x growth potential for ISRG stock.
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