If Intuitive Surgical Stock Looks Expensive, You Need To Read This

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Intuitive Surgical (ISRG), the pioneer of robotic-assisted surgery, trades at 40.0 times its adjusted earnings over the last twelve months. This profit figure adds stock-based compensation back after tax. Even on that higher profit, you are paying up front for a lot of growth. While that is a high price on what the company has already earned, the price reads differently when set against the profit expected over the next two years. Here is what the same share price looks like on the profit Intuitive Surgical is expected to earn next.

How Intuitive Surgical Stock Is Priced On Expected Profit

The consensus forecast puts Intuitive Surgical’s net income at $3.99 billion for fiscal 2026 and $4.55 billion for fiscal 2027. Based on that forecast, the company’s $158 billion market value is 39.5 times fiscal 2026 net income, compared with 40.0 times adjusted earnings over the last twelve months. The analyst data does not say whether its net income is adjusted the same way. On fiscal 2027 net income, the same value is 34.7 times.

The Sales And Margin Intuitive Surgical Must Deliver

For fiscal 2027, the consensus forecast has Intuitive Surgical’s revenue at $13.3 billion, or 12.1% more than the forecast for fiscal 2026. That pace is slower than the 20.5% revenue growth the company reported over the last twelve months. Management also expects worldwide da Vinci procedures to grow 14% to 15% in fiscal 2026.

The consensus forecast is more ambitious on the margin, setting the net margin at 34.1% in fiscal 2027. That compares with 31.5% for fiscal 2025 in the same analyst data, while the forecast for fiscal 2026 already assumes 33.6%. Forecasted net income grows 13.9% in fiscal 2027. Because this is faster than revenue, the forecast has the company keeping more of each dollar of sales in fiscal 2027 than in fiscal 2026. On the adjusted earnings behind the 40.0 times multiple, the company kept about 34% of its sales over the last twelve months. So the forecast margin is close to what it already earns, not a stretch.

Where Intuitive Surgical’s Forecast Could Fall Short

The likeliest place is instrument pricing. Instruments and Accessories brought in 59.8% of Intuitive Surgical’s revenue in fiscal 2025. On the fiscal Q3 2026 call, management said its pricing actions and a price reduction in China would lower da Vinci instrument and accessory revenue per procedure by about 3% to 5% once fully implemented. The China cut starts in November, and longer-life instruments will roll out country by country starting in the first half of 2027. If the consensus forecast does not fully allow for those cuts, both revenue and the margin would come in below it.

Spending is the other place. On the same call, management said it was not ready to say what it will do on operating expenses and will give that guidance in January. Management also expects higher input costs in areas like freight and semiconductor memory. More spending or higher costs would leave less of each dollar of sales as profit, while the forecast already assumes a wider net margin.

If Intuitive Surgical delivers the consensus forecast, the fiscal 2027 multiple is a fair picture of what you pay for Intuitive Surgical stock. The margin is where it could fall short, through instrument price cuts and spending in fiscal 2027, though management said it expects the pricing hit to gross margin to be modest and offset by cost cuts. A shortfall there would make the stock a riskier bet, priced for profit the company has not yet earned. Management’s operating expense guide for fiscal 2027, expected with the next report in January 2027, is the figure to watch.

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What Intuitive Surgical is worth depends on profits it has not yet earned. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax.

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