As of June 4, 2025, Intuitive Surgical Inc's estimated intrinsic value ranges from $69.94 to $421.76 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $421.76 | -23.6% |
| Discounted Cash Flow (5Y) | $351.51 | -36.3% |
| Dividend Discount Model (Multi-Stage) | $182.79 | -66.9% |
| Dividend Discount Model (Stable) | $204.39 | -63.0% |
| Earnings Power Value | $69.94 | -87.3% |
Is Intuitive Surgical Inc (ISRG) undervalued or overvalued?
With the current market price at $551.85, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Intuitive Surgical Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.65 | 0.82 |
| Cost of equity | 6.9% | 9.5% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 10.4% | 12.0% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 5.7% | 6.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $352 | $123,416M | 90.3% |
| 10-Year Growth | $422 | $148,592M | 82.1% |
| 5-Year EBITDA | $246 | $85,492M | 86.0% |
| 10-Year EBITDA | $301 | $105,465M | 74.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,403M |
| Discount Rate (WACC) | 6.9% - 5.7% |
| Enterprise Value | $20,244M - $24,747M |
| Net Debt | $(2,574)M |
| Equity Value | $22,818M - $27,321M |
| Outstanding Shares | 358M |
| Fair Value | $64 - $76 |
| Selected Fair Value | $69.94 |
| Metric | Value |
|---|---|
| Market Capitalization | $197794M |
| Enterprise Value | $195220M |
| Trailing P/E | 79.88 |
| Forward P/E | 70.60 |
| Trailing EV/EBITDA | 18.95 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.81 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $126.53 |
| Discounted Cash Flow (5Y) | 25% | $87.88 |
| Dividend Discount Model (Multi-Stage) | 20% | $36.56 |
| Dividend Discount Model (Stable) | 15% | $30.66 |
| Earnings Power Value | 10% | $6.99 |
| Weighted Average | 100% | $288.62 |
Based on our comprehensive valuation analysis, Intuitive Surgical Inc's weighted average intrinsic value is $288.62, which is approximately 47.7% below the current market price of $551.85.
Key investment considerations:
Given these factors, we believe Intuitive Surgical Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.