Intuitive Surgical Stock Now 12% Cheaper, Time To Buy

Intuitive Surgical (ISRG) stock might be a good buy now. Why? Because you get high margins – reflective of pricing power and cash generation capacity – for a discounted price. Companies like this generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. The market tends to reward that.

What Is Happening With ISRG

ISRG is up 8.9% so far this year, but is actually 12% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago.

Here is what’s going well for the company. Intuitive Surgical’s stock has gained 8.70% year-to-date, reflecting strong operational performance. Q3 2025 saw worldwide procedures increase by 20%, driven by robust adoption of the da Vinci 5 system, with 240 units placed, contributing to an installed base nearing 10,800 systems. This expanding base and 85% recurring revenue from instruments and services solidify high cash generation. Management also raised full-year 2025 procedure growth guidance to 17-17.5%, indicating continued strong demand and pricing power.

ISRG Has Strong Fundamentals

• Recent Profitability: Nearly 30.8% operating cash flow margin and 29.3% operating margin LTM.
• Long-Term Profitability: About 27.8% operating cash flow margin and 26.7% operating margin last 3-year average.
• Revenue Growth: Intuitive Surgical saw growth of 22.2% LTM and 16.3% last 3-year average, but this is not a growth story
• Available At Discount: At P/S multiple of 16.6, ISRG stock is available at a 12% discount vs 1 year ago.

Below is a quick comparison of ISRG fundamentals with S&P medians.

*LTM: Last Twelve Months

Don’t Expect A Slam Dunk, Though

While ISRG stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. ISRG plunged 82% in the Dot-Com crash and 76% during the Global Financial Crisis. The inflation shock dragged it down nearly 50%, while the Covid selloff hit around 40%. Even the 2018 correction meant a 24% drop. The stock has strong fundamentals, but these numbers show it’s still vulnerable when markets turn sour. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ISRG Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

If you want more details, read Buy or Sell ISRG Stock.

How We Arrived At ISRG Stock

ISRG piqued our interest because it meets the following criteria:

1. Greater than $10 Bil in market cap
2. High CFO (cash flow from operations) margins or operating margins
3. Meaningfully declined in valuation over the past 1 year

But if ISRG doesn’t look good enough to you, here are other stocks that also check all these boxes:

1. Visa (V)
2. T-Mobile US (TMUS)
3. Salesforce (CRM)

Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 19%
• 12-month win rate (percentage of picks returning positive) of about 72%

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