Is ISRG Stock Really As Expensive As It Looks?

Intuitive Surgical (ISRG), maker of the da Vinci surgical robots, trades at about $382, some 36% below its 52-week high. Even so, you pay about 35.9 times trailing adjusted earnings. That is normalized net income with stock-based compensation added back, a basis meant to sit closer to the one analysts forecast on, though the two are not defined identically. Analysts’ forecasts run to 2027, the year Intuitive plans to start lowering what customers pay per use on some instruments.

Why Intuitive Surgical Still Costs This Much After Its Slide

The shares were trading about 11% lower the day after second-quarter results in July showed slower US procedure growth. US da Vinci procedures grew 12% in the second quarter, against 14% in the first. Management pointed to two likely causes, with the CFO noting that some customers say coverage changes are delaying deferrable procedures, alongside a little of the law of large numbers.

What the price still pays for is revenue growing faster than procedures. On the first-quarter call, the CFO credited that largely to da Vinci 5 and its higher pricing. More than half of the da Vinci systems Intuitive placed in the second quarter were da Vinci 5.

But What Does The Same Price Buy On Analysts’ Forecasts?

On analysts’ 2026 estimates, today’s price is about 35.1 times earnings. On their 2027 estimates, it is about 31.4 times. The revenue forecast behind that looks modest: about 13.1% growth a year through 2027, against 20.7% growth over the past twelve months.

Consensus has earnings and revenue growing at a similar pace between 2026 and 2027, so margins hold roughly steady. Intuitive enters that stretch with an operating margin of 31.3% over the past twelve months, above its three-year average of 27.7%.

So Can Intuitive Surgical Keep Margins Steady Once It Lowers Some Customer Costs?

In the first half of 2027, Intuitive plans to introduce a subset of instruments with longer useful lives and a lower cost per use for customers. The extended use program targets high-volume benign procedures, where management sees room for extra growth. Stapling, energy products and force feedback instruments are left out.

The bet is volume. Management expects lower customer costs to support broader adoption of da Vinci surgery, and the CFO says the company is balancing growth against profitability. Pricing is still being finalized, and Intuitive will not size the effect until its next earnings call. Against that, force feedback instruments and the shift toward da Vinci 5 have added to da Vinci instruments and accessories (I&A) revenue per procedure.

So the 2027 multiple leans on two numbers Intuitive has not given yet: how much the program lowers what customers pay, and how many extra procedures that brings. Estimates from the 17 analysts covering 2027 earnings sit between $11.82 and $12.67 a share, a narrow band for a year whose pricing is still being set.

So Do You Pay Up For Intuitive Surgical Before It Prices The Program?

On analysts’ forecasts the stock is still expensive, and those forecasts come before the program has a price. Paying that kind of price only makes sense if you trust Intuitive’s newest systems to carry margins through the transition. The trailing multiple cannot tell you that.

Checking what the forecasts rest on for every stock you own is a job in itself. Since its inception, our rule-based Trefis High Quality Portfolio has outperformed its benchmark, a blend of three major indices.

Or start with our Forward Valuation Discount screen, which ranks stocks trading at the deepest discounts to their projected earnings multiples.