Intuitive Surgical (ISRG) AI Stock Analysis

• Market Cap: $178.81B
• Dividend Yield: N/A
• Average Volume (3M): 2.04M
• Price to Earnings (P/E): 63.9
• Beta (1Y): 1.15
• Revenue Growth: 22.18%
• EPS Growth: 21.37%
• Country: US
• Employees: 15,638
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 2.53
• Shares Outstanding: 355,130,250
• 10 Day Avg. Volume: 1,482,291
• 30 Day Avg. Volume: 2,039,999
• PEG Ratio: 3.17
• Price to Book (P/B): 11.34
• Price to Sales (P/S): 20.08
• P/FCF Ratio: 81.16
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 17.46
• Enterprise Value/Gross Profit: 26.46
• Enterprise Value/Ebitda: 48.51
• 1Y Price Target: $647.56
• Price Target Upside: 28.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 10.04
• Revenue Forecast (FY): $11.52B

• Rating: 76 Outperform
• Price Target: $557.00 ▲(10.62% Upside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

ISRG scores well primarily on strong financial performance (high margins, robust cash generation, very low leverage) and a largely positive earnings outlook with solid procedure growth guidance and increasing recurring revenue mix. The score is held back by bearish technical signals (price below key moving averages with negative MACD) and a demanding valuation (P/E 62.57), alongside guided near-term margin pressure from tariffs and mix.

Positive Factors

High recurring revenue mix

An 81% recurring revenue mix (instruments, accessories and service) provides durable revenue visibility and cash conversion as procedures scale. This reduces reliance on lumpy system placements, supports margin resilience, and underpins predictable free cash flow and long-term ROI on installed base growth.

Conservative balance sheet & cash generation

Extremely low leverage and a large cash position give Intuitive flexibility to fund R&D, absorb regional capital softness, buy back stock, and invest in clinical rollouts without refinancing risk. Strong operating cash flow and rising FCF support durable investment in platform expansion and margin initiatives.

Platform adoption & regulatory expansion

Regulatory clearance for cardiac indications expands the addressable market and increases cross‑specialty adoption. Combined with a growing installed base and da Vinci 5 placements, broader indications drive more procedures, consumable attach rates, and service revenue over multiple years, strengthening structural growth.

Negative Factors

Tariff-driven margin pressure

Sustained tariff headwinds materially compress gross margins until supply‑chain or pricing changes take effect. Given Intuitive's high-margin model, even ~1–1.2% revenue headwind reduces operating margins and cash flow, forcing trade-offs between pricing, investment, or cost restructuring across quarters.

China & Japan capital and tender risks

Weakness in China and Japan affects durable capital placements and revenue mix in critical OUS markets. Tender dynamics and reimbursement uncertainty can depress long‑term penetration rates, slow installed‑base growth, and increase pricing pressure in regions that account for a meaningful portion of procedure expansion.

ASP and product mix pressure

A strategic shift toward refurbished and trade‑in units lowers system ASPs and capital revenue per placement. While recurring consumable revenue may rise, lower ASPs reduce near‑term cash inflows tied to placements and can slow FCF growth tied to capital sales, complicating margin and investment planning.

Intuitive Surgical Business Overview & Revenue Model

Company Description

Intuitive Surgical, Inc. develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care in the United States and internationally. The company offers the da Vinci Surgical System to enable complex surgery using a minimally invasive approach; and Ion endoluminal system, which extends its commercial offerings beyond surgery into diagnostic procedures enabling minimally invasive biopsies in the lung. It also provides a suite of stapling, energy, and core instrumentation for its surgical systems; progressive learning pathways to support the use of its technology; a complement of services to its customers, including support, installation, repair, and maintenance; and integrated digital capabilities providing unified and connected offerings, streamlining performance for hospitals with program-enhancing insights. The company was incorporated in 1995 and is headquartered in Sunnyvale, California.

How the Company Makes Money

Intuitive Surgical generates revenue primarily through the sale of its da Vinci Surgical Systems, as well as through recurring revenue streams from instruments and accessories and service agreements. The company sells its robotic systems to hospitals and surgical centers, which then purchase additional instruments and accessories for each procedure performed. These recurring sales contribute significantly to Intuitive Surgical's revenue. Additionally, the company offers service contracts to maintain and support the installed systems, providing another steady source of income. Key partnerships with healthcare providers and ongoing innovation in surgical technology further bolster Intuitive Surgical's earnings by expanding its market reach and enhancing its product offerings.

Intuitive Surgical Financial Statement Overview

Summary

High-quality fundamentals supported by strong multi-year revenue growth, consistently high profitability (gross margin ~66–69%, net margin ~28% in 2025), and exceptionally low leverage (debt-to-equity ~0.017). Cash generation is strong with 2025 free cash flow ~$2.49B and operating cash flow exceeding net income, though free cash flow showed volatility in 2022–2023 and margins face modest pressure versus prior peaks.

Income Statement

Revenue has compounded strongly from 2020 to 2025 (from ~$4.36B to ~$10.06B), with growth re-accelerating in 2024 and staying positive in 2025. Profitability is a clear strength: gross margin has remained consistently high (~66–69%) and net margin has held in the high-20% range recently (2025 ~28%). The main watch item is modest margin pressure versus earlier peaks (e.g., net margin below 2021 levels), suggesting profitability is strong but not fully expanding alongside revenue.

Balance Sheet

The balance sheet is exceptionally conservative, with very low leverage (debt-to-equity ~0.017 in 2025) and large, growing equity ($17.8B in 2025). Returns on equity are healthy and improving (roughly ~12% in 2022 to ~16% in 2025), signaling good capital efficiency without relying on debt. The primary weakness is limited—given the low leverage, the company is not using debt to amplify returns, but the trade-off is meaningfully lower financial risk.

Cash Flow

Cash generation is strong and improving, with operating cash flow rising to ~$3.03B in 2025 and free cash flow to ~$2.49B, supported by positive free-cash-flow growth in 2024 and 2025. Cash earnings quality is solid: operating cash flow exceeds net income (coverage ~1.51 in 2025), indicating profits are well supported by cash. The key weakness is historical volatility in free cash flow (notable declines in 2022–2023), though the recent rebound reduces concern.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.06B	8.35B	7.12B	6.22B	5.71B
Gross Profit	6.64B	5.63B	4.73B	4.20B	3.96B
EBITDA	3.62B	2.81B	2.17B	1.94B	2.13B
Net Income	2.86B	2.32B	1.80B	1.32B	1.70B
Balance Sheet
Total Assets	20.63B	18.84B	15.44B	12.97B	13.55B
Cash, Cash Equivalents and Short-Term Investments	5.93B	4.01B	5.22B	4.12B	4.23B
Total Debt	302.80M	146.00M	0.00	0.00	87.00M
Total Liabilities	2.69B	2.31B	2.04B	1.86B	1.60B
Stockholders Equity	17.82B	16.43B	13.31B	11.04B	11.95B
Cash Flow
Free Cash Flow	2.49B	1.30B	749.60M	958.40M	1.74B
Operating Cash Flow	3.03B	2.42B	1.81B	1.49B	2.09B
Investing Cash Flow	665.80M	-3.27B	-360.10M	1.37B	-2.46B
Financing Cash Flow	-2.36B	150.90M	-287.60M	-2.57B	43.00M

Intuitive Surgical Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 503.51
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ISRG, the sentiment is Neutral. The current price of 503.51 is above the 20-day moving average (MA) of 493.59, below the 50-day MA of 531.42, and below the 200-day MA of 514.49, indicating a neutral trend. The MACD of -6.70 indicates Negative momentum. The RSI at 47.75 is Neutral, neither overbought nor oversold. The STOCH value of 85.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ISRG.

Intuitive Surgical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RMD	78 Outperform	$37.33B	25.33	25.68%	0.92%	9.36%	29.56%
ISRG	76 Outperform	$178.81B	63.93	16.67%	―	22.18%	21.37%
WST	72 Outperform	$18.32B	37.45	16.85%	0.32%	4.90%	-0.26%
BDX	68 Neutral	$50.25B	28.83	6.96%	2.13%	8.23%	-2.04%
HOLX	66 Neutral	$16.82B	31.27	10.86%	―	1.74%	-25.29%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
BAX	47 Neutral	$10.48B	-12.13	-13.75%	2.75%	-21.20%	-325.40%

Intuitive Surgical Corporate Events

Intuitive Surgical Restructures Digital and AI Leadership Role

Effective January 1, 2026, Intuitive Surgical announced that Brian E. Miller, Ph.D., will move from his current role as Chief Digital Officer to serve as Head of Digital and AI Strategy, shifting his responsibilities within the company’s leadership structure. In his new position, Miller will no longer report directly to the chief executive officer, signaling an internal reorganization of how Intuitive manages its digital and artificial intelligence initiatives, with potential implications for strategic oversight and the integration of these capabilities across the business.

The most recent analyst rating on (ISRG) stock is a Buy with a $650.00 price target. To see the full list of analyst forecasts on Intuitive Surgical stock, see the ISRG Stock Forecast page.