Are You Overpaying For Intuitive Surgical Stock Versus Its Rivals?

Intuitive Surgical (ISRG) grows faster and earns a higher operating margin than any of the five rivals in its health care peer group. It is also the most expensive of the six when price is measured against earnings. It holds that place even after its stock fell 10.3% over the past twelve months. How much more do you pay for a dollar of Intuitive’s earnings than for a dollar of a rival’s?

Intuitive’s Earnings Cost You Over Twice Globus Medical’s

You pay more than twice as much for Intuitive’s earnings as for Globus Medical’s. Intuitive trades at 45.3 times its earnings of the past twelve months, a ratio called the P/E. Globus Medical trades at 18.8 times, the lowest P/E in the group.

Globus Medical is the closest rival on growth. Its revenue grew 19.7% over the past twelve months, against 20.7% for Intuitive. Profit is where the two differ. Intuitive kept 31.3% of its revenue as operating profit, and Globus Medical kept 21.4%.

Intuitive’s revenue grew one percentage point faster than GMED, and its operating margin is about ten percentage points higher. All five rivals have a lower P/E and slower revenue growth than Intuitive. Intuitive also has the highest operating margin of the six.

Intuitive Earns Most Of Its Revenue After The Sale

Intuitive earns most of its revenue after it has sold a system. It sells da Vinci surgical systems and then sells the instruments used in each procedure. In fiscal 2025, Instruments and Accessories brought in $6.0 billion of its $10.1 billion in revenue. Systems brought in $2.5 billion, and Service brought in $1.6 billion.

Intuitive had almost 13,000 systems installed worldwide at the end of fiscal Q2 2026. Total procedures grew 16% in that quarter. Management counted 85% of the quarter’s revenue as recurring.

Each procedure on an installed system brings Intuitive instrument revenue. The price appears to assume surgeons keep doing more procedures on those systems.

Can Intuitive Keep Its Procedures Growing?

Management expects so. On its fiscal Q2 2026 call, it kept its forecast for 2026 da Vinci procedure growth at 13.5% to 15.5%. That forecast covers the full year and counts only da Vinci procedures. The 16% growth was for total procedures in a single quarter.

Growth in the U.S. has already slowed, mostly in procedures that patients can put off. Management said some customers link the slowdown to changes in patient insurance coverage. For 2026, da Vinci procedure growth below 13.5% would mean growth is slowing faster than management expected.

Intuitive also plans to sell some instruments that last for more uses, starting in the first half of 2027. Those instruments will cost customers less per use. Management has not yet said what that will do to its revenue.

Intuitive leads its group on growth and margin, and the price appears to assume that lead continues. But U.S. growth has already slowed, and the longer-lasting instruments will lower what customers pay per use. The next quarterly report will show whether the 13.5% to 15.5% procedure forecast still stands. Management has said it will give more numbers on those instruments on its next earnings call.

How To Act On ISRG?

Now you know ISRG better. And that’s our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.

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