Intuitive Surgical (ISRG) AI Stock Analysis

• Market Cap: $169.93B
• Dividend Yield: N/A
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 60.8
• Beta (1Y): 1.16
• 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: 354,496,060
• 10 Day Avg. Volume: 2,345,496
• 30 Day Avg. Volume: 1,696,789
• PEG Ratio: 2.88
• Price to Book (P/B): 11.28
• Price to Sales (P/S): 22.20
• P/FCF Ratio: 142.20
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 17.31
• Enterprise Value/Gross Profit: 26.06
• Enterprise Value/Ebitda: 46.45
• 1Y Price Target: $652.73
• Price Target Upside: 36.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $599.00 ▲(25.19% Upside)

The score is driven primarily by best-in-class financial strength (high margins, strong cash generation, and a debt-free balance sheet) and supportive earnings-call guidance for continued procedure growth. Offsetting factors are weak near-term technical momentum and a premium valuation that increases sensitivity to any margin or growth headwinds (tariffs, mix, and higher operating expenses).

Positive Factors

High recurring revenue mix

An 81% recurring revenue mix from instruments, accessories and service creates durable revenue visibility tied to procedure volume and installed base growth. This per‑procedure economics supports stable margins and predictable cash flows over the coming months as adoption expands.

Debt-free, conservative balance sheet

Zero reported TTM debt and a large equity/asset base materially reduce financial risk and preserve flexibility. Combined with strong operating cash flow (TTM ~$3.0B) and rising free cash flow, the company can fund R&D, placements and buybacks without resorting to leverage.

Rapid procedure and platform adoption

Sustained double‑digit procedure growth, plus rapid adoption of da Vinci 5, SP (+87% single‑port) and Ion (+51%), expands the installed base and addressable procedures. That drives recurring consumable demand and long‑term utilization gains across geographies.

Negative Factors

Tariff and product‑mix margin headwinds

Management expects tariff impacts (~1.2% of revenue) and a higher mix of newer, lower‑margin platforms to pressure gross margins. These structural cost and mix effects can persist across multiple quarters, reducing margin resilience even as revenue grows.

Elevated operating expense growth

Sustained OpEx growth (incl. large one‑offs, hiring and elevated stock‑based comp of ~$890–$920M) reduces operating leverage and compresses net margins. If higher expense levels persist, they could offset revenue-driven margin gains over the next several quarters.

Geographic competitive & reimbursement risk (China, Japan)

Regional tender dynamics and local competition in China are exerting pricing and placement pressure, while Japan faces budget/reimbursement uncertainty that can materially affect capital purchases. These structural geographic risks can dampen growth and capital revenue in key markets.

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 with strong profitability (gross margin ~66%, operating margin ~31%, net margin ~29%), an exceptionally conservative balance sheet with no debt, and strong operating/free cash flow generation. Main watch item is periodic cash conversion volatility (FCF below net income).

Income Statement

TTM (Trailing-Twelve-Months) revenue is $9.6B with solid growth (+5.1%) and very strong profitability (gross margin ~66%, operating margin ~31%, net margin ~29%). Margins have generally remained high and improved versus 2022–2023, though they are still below the peak levels seen in 2021 (when net margin was ~30% and operating margin ~32%), indicating some sensitivity to mix/cost pressures.

Balance Sheet

Balance sheet is exceptionally conservative: TTM total debt is $0 (and historically minimal), with a very large equity base ($16.9B) supporting $19.4B of assets. Returns on equity are strong (TTM ~16%), improving versus prior years, and the near-zero leverage profile materially reduces financial risk—though it also means growth is primarily funded through operations rather than balance-sheet leverage.

Cash Flow

Cash generation is strong and improving: TTM operating cash flow is $3.0B and free cash flow is $2.27B, with free cash flow up +13.9%. Operating cash flow comfortably exceeds net income (about 1.64x), signaling high earnings quality, but free cash flow is meaningfully below net income (about 0.77x), suggesting working-capital timing, reinvestment, or other cash uses can create periodic conversion volatility (also reflected historically by uneven free-cash-flow growth).

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.61B	8.35B	7.12B	6.22B	5.71B	4.36B
Gross Profit	6.38B	5.63B	4.73B	4.20B	3.96B	2.86B
EBITDA	3.58B	2.81B	2.17B	1.94B	2.13B	1.33B
Net Income	2.75B	2.32B	1.80B	1.32B	1.70B	1.06B
Balance Sheet
Total Assets	19.35B	18.84B	15.44B	12.97B	13.55B	11.17B
Cash, Cash Equivalents and Short-Term Investments	4.91B	4.01B	5.22B	4.12B	4.23B	5.17B
Total Debt	0.00	146.00M	0.00	0.00	87.00M	0.00
Total Liabilities	2.31B	2.31B	2.04B	1.86B	1.60B	1.41B
Stockholders Equity	16.93B	16.43B	13.31B	11.04B	11.95B	9.76B
Cash Flow
Free Cash Flow	2.27B	1.30B	749.60M	958.40M	1.74B	1.14B
Operating Cash Flow	2.96B	2.42B	1.81B	1.49B	2.09B	1.48B
Investing Cash Flow	-389.00M	-3.27B	-360.10M	1.37B	-2.46B	-940.60M
Financing Cash Flow	-2.18B	150.90M	-287.60M	-2.57B	43.00M	-85.70M

Intuitive Surgical Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 478.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ISRG, the sentiment is Negative. The current price of 478.49 is below the 20-day moving average (MA) of 533.20, below the 50-day MA of 553.86, and below the 200-day MA of 516.34, indicating a bearish trend. The MACD of -19.64 indicates Positive momentum. The RSI at 19.78 is Positive, neither overbought nor oversold. The STOCH value of 7.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ISRG.

Intuitive Surgical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ISRG	78 Outperform	$169.93B	60.75	16.67%	―	22.18%	21.37%
RMD	78 Outperform	$38.32B	24.85	25.68%	0.92%	9.36%	29.56%
BDX	68 Neutral	$59.22B	35.50	6.54%	2.13%	8.23%	-2.04%
WST	68 Neutral	$17.05B	34.21	16.94%	0.32%	4.90%	-0.26%
HOLX	63 Neutral	$16.65B	30.95	10.86%	―	1.74%	-25.29%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
BAX	47 Neutral	$10.81B	-40.33	-4.70%	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.