Intuitive Surgical, Inc. (ISRG) Intrinsic Value & DCF Valuation
Medical - Instruments & Supplies · NASDAQ
Current Price
$378.81
Intrinsic Value
$361.98
-4.6% margin of safety
What Is Intuitive Surgical, Inc.'s Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Intuitive Surgical, Inc. (ISRG) at $361.98 per share, compared with a market price of $378.81, a margin of safety of -4.6%. The base case assumes 13.0% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $304.08 to $427.5. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Intuitive Surgical, Inc. (ISRG) Undervalued?
At $378.81, ISRG trades about 4.6% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Proprietary Technology & IP
Intuitive Surgical holds extensive patents for its da Vinci surgical systems. This intellectual property creates a significant barrier to entry for competitors seeking to replicate its advanced robotic technology.
↑High Switching Costs for Hospitals
Hospitals invest heavily in da Vinci systems, training, and infrastructure. The cost and disruption of switching to a competitor's platform are substantial, fostering customer loyalty.
↑Established Ecosystem & Training
ISRG has built a comprehensive ecosystem including surgeon training programs and a large installed base. This network effect makes it difficult for new entrants to gain traction and displace established relationships.
INVESTMENT RISKS
↓Slowing Procedure Growth
Recent reports indicate a slowdown in US procedure growth, potentially due to factors like ACA-related care deferrals. This trend could impact revenue if it persists beyond temporary headwinds.
↓Regulatory Scrutiny & Approval
The medical device industry is subject to stringent regulatory oversight. Any delays or issues in obtaining approvals for new products or enhancements could hinder growth.
↓Technological Obsolescence
While ISRG has strong IP, rapid advancements in robotics and AI could eventually lead to its current technology becoming less competitive. Continuous innovation is crucial.
Base case
ISRG base case valuation
Intrinsic Value
$361.98
Margin of safety
-4.6%
Expected annual return
-0.9%
Base case assumptions: 13.0% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ISRG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Intuitive Surgical, Inc. respond.
Open DCF Calculator for ISRGCompany Overview
Intuitive Surgical, Inc. is a leading medical technology firm dedicated to advancing patient care by developing, producing, and commercializing sophisticated tools. These innovations empower medical professionals to deliver superior, accessible, and less-invasive treatment options to patients both within the United States and across international markets. Its flagship offering, the da Vinci Surgical System, facilitates intricate operations through a minimally disruptive approach. Expanding beyond surgical applications, the company also provides the Ion endoluminal system, designed for diagnostic interventions like minimally invasive lung biopsies. Complementing its primary systems, Intuitive Surgical supplies a comprehensive array of instruments, including stapling tools, energy devices, and essential core components. Furthermore, it offers structured training programs to ensure proficient use of its technology, alongside extensive customer support services encompassing installation, repairs, and ongoing maintenance. The firm also integrates digital capabilities to deliver unified, connected solutions that optimize hospital performance through actionable insights. Established in 1995, Intuitive Surgical maintains its corporate headquarters in Sunnyvale, California.
Financial Metrics — ISRG Stock Valuation Data
Revenue/Share (TTM)
$31.13
FCF/Share (TTM)
$9.09
ROIC (TTM)
15.1%
ROE (TTM)
17.8%
P/FCF
41.5x
EV/EBITDA
29.1x
FCF Yield
2.41%
Debt/Equity
0.00x
On a trailing twelve-month basis, ISRG generates free cash flow per share of $9.09 alongside a ROIC of 15.1%, both central inputs for a DCF valuation. Its P/FCF ratio of 41.5x and FCF yield of 2.41% then frame how ISRG is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of ISRG?
Intuitive Surgical, Inc. currently generates $9.09 in free cash flow per share. At the current price of $378.81, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ISRG undervalued?
ISRG trades at a P/FCF ratio of 41.5x with a free cash flow yield of 2.41%. A high P/FCF means investors are paying more per dollar of free cash flow, which usually reflects expectations of future growth. However, whether ISRG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ISRG stock using DCF?
To perform a DCF valuation on Intuitive Surgical, Inc.: (1) Start with the trailing free cash flow per share ($9.09) as the base, (2) project future FCF growth over 5-10 years based on Medical - Instruments & Supplies industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ISRG's risk profile — with a debt-to-equity of 0.00x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ISRG?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Intuitive Surgical, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Medical - Instruments & Supplies trends, then discounting those amounts to today's dollars. ISRG's ROIC of 15.1% reflects how efficiently the company converts invested capital into profit.
How does WACC affect ISRG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ISRG, with a debt-to-equity ratio of 0.00x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 29.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ISRG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value ISRG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.