Should You Buy Intuitive Surgical Stock Now Or Wait?
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Intuitive Surgical (ISRG) stock has gained 30.9% in three months. That rally included a 9.4% jump on November 4 and occurred as the S&P 500 barely moved. The shares remain 18.7% below their January high. A buyer today pays 56.9 times the company’s last twelve months of earnings, compared with 22.8 for the S&P 500. Have you already missed the better part of this run?
You Now Pay More For Intuitive Surgical’s Earnings
You have missed the cheaper price because part of the run has already gone into the multiple. At the end of September, the shares traded at 48.0 times those same twelve months of earnings, in the lower part of their range over the past ten years. The operating margin under that multiple, 32.3% over the twelve months, sat in the upper part of its own ten-year range. A low multiple on a high margin made the September price look inexpensive against the stock’s own ten-year history.
Management said those earnings include a $450 million third-quarter litigation settlement with U.S. customers in a class action lawsuit. Third-quarter net margin was 17.1%, against 28.3% in the second quarter. Valued on operating cash flow, the price is a lower 41.1 times. Buyers may be paying well above the S&P 500’s multiple for steady sales: management said 84% of third-quarter revenue was recurring.
How Fast Must Intuitive Surgical Grow From Here?
Intuitive Surgical needs to grow revenue about 15% in the fourth quarter of 2026 to meet what analysts expect. Analysts forecast about $3.3 billion for that quarter, against $2.87 billion a year earlier. Revenue grew between 18.5% and 23.0% in each of the past four quarters, so analysts already expect a slowdown.
Management expects da Vinci procedures to grow 14% to 15% for all of 2026, after narrowing it in October from a prior range of 13.5% to 15.5%. The fourth quarter also brings lower prices in China. Management expects that cut and wider pricing actions on instruments to lower da Vinci instrument and accessory revenue per procedure by about 3% to 5% once fully implemented, with the mix of procedures held constant. In the third quarter, that revenue was about $1,860 per procedure, up from $1,800 a year earlier.
When Does Intuitive Surgical Report Next?
Intuitive Surgical is expected to report its fourth-quarter 2026 results in January 2027. That same month, management plans to issue operating expense guidance and update its estimate of the long-term opportunity in soft tissue surgery.
The stock has moved sharply in both directions following some recent reports. Shares rose 19.1% over the two trading days after the October 2025 report. They fell 12.2% over the same span following the July 2026 report, and rose 1.3% after the latest report in October 2026. Buying before the report also means owning the stock through any market sell-off: during the 2025 tariff shock, Intuitive Surgical fell 26.0% from peak to low, against 19.0% for the S&P 500.
Buying now proves premature if the January report shows fourth-quarter revenue below what analysts expect, or 2026 procedure growth below management’s range. Waiting turns out too late if revenue comes in above that forecast, even with lower prices in China during the quarter.
Now You Know Intuitive Surgical. Here Is A Better Way To Invest
Before you decide on ISRG, consider owning 30 quality companies instead of one. The Trefis High Quality (HQ) Portfolio has returned 105% since its September 2020 launch, ahead of a benchmark that combines the S&P 500, S&P MidCap and Russell 2000.
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