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Intuitive Surgical: What's Happening With ISRG Stock?

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Intuitive Surgical stock (NASDAQ: ISRG) has dropped 16% this year, notably lagging behind the S&P 500’s 10% increase. The stock has experienced downward pressure recently after management indicated that potential tariffs may adversely affect its performance in 2026.

This raises an essential question: Is ISRG a buy at below $450? We believe it is. Although the stock’s high valuation makes it susceptible to negative events, we perceive little cause for concern regarding the company’s fundamental operations. Our assessment is grounded in an examination of Intuitive Surgical’s critical metrics—such as Growth, Profitability, and Financial Stability—which indicate that its operational performance and financial state continue to be exceptionally robust.

However, if you are looking for an upside with reduced volatility compared to holding an individual stock, consider the High Quality Portfolio. It has consistently outperformed its benchmark—a mix of the S&P 500, Russell, and S&P MidCap indexes—and has realized returns surpassing 91% since its inception. Additionally, see – GOOG Stock To $400?

How Does Intuitive Surgical’s Valuation Compare to The S&P 500?

When considering what you pay per dollar of sales or profit, ISRG stock appears very expensive in comparison to the wider market.

  • Intuitive Surgical has a price-to-sales (P/S) ratio of 17.4 compared to a figure of 3.3 for the S&P 500
  • Furthermore, the company’s price-to-free cash flow (P/FCF) ratio is 79.8 as opposed to 21.0 for the S&P 500
  • Additionally, it has a price-to-earnings (P/E) ratio of 61.0 compared to the benchmark’s 23.9

How Have Intuitive Surgical’s Revenues Developed Recently?

Intuitive Surgical’s Revenues have significantly increased over the past few years.

  • Intuitive Surgical has experienced an average top-line growth rate of 15.4% over the last 3 years (compared to an increase of 5.3% for the S&P 500)
  • Its revenues have increased by 20.8% from $7.6 Billion to $9.1 Billion in the last 12 months (versus a growth of 5.1% for the S&P 500)
  • Moreover, its quarterly revenues have risen by 21.4% to $2.4 Billion in the most recent quarter from $2.0 Billion a year earlier (compared to a 6.1% improvement for the S&P 500)

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How Profitable Is Intuitive Surgical?

Intuitive Surgical’s profit margins are significantly higher than those of most companies within the Trefis coverage universe.

Is Intuitive Surgical Financially Stable?

Intuitive Surgical’s balance sheet appears very robust.

  • Intuitive Surgical is completely free of debt.
  • Cash (including cash equivalents) constitutes $5.3 Billion of the $20 Billion in Total Assets for Intuitive Surgical. This results in a very strong Cash-to-Assets Ratio of 26.4% (compared to 7.2% for the S&P 500)

How Resilient Is ISRG Stock in a Downturn?

ISRG stock has experienced a slightly worse impact than the benchmark S&P 500 index during some recent downturns. Concerned about how a market crash might affect ISRG stock? Our dashboard ISRG Lost 5.9% In A Day. Should You Buy Or Wait? offers a thorough analysis of how the stock fared during and after past market crashes.

Inflation Shock (2022)

  • ISRG stock dropped 49.9% from a peak of $365.42 on 8 November 2021 to $183.06 on 14 October 2022, while the S&P 500 saw a peak-to-trough decline of 25.4%
  • The stock fully recovered to its pre-Crisis peak by 18 January 2024
  • Since that time, the stock has risen to a high of $610.45 on 22 January 2025 and is currently trading at around $440

COVID-19 Pandemic (2020)

  • ISRG stock fell 40.5% from a peak of $206.10 on 20 February 2020 to $122.58 on 23 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 17 July 2020

Global Financial Crisis (2008)

  • ISRG stock fell 75.9% from a peak of $39.32 on 10 April 2008 to $9.48 on 2 March 2009, compared to a peak-to-trough decline of 56.8% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 1 March 2010

Putting All The Pieces Together: What It Means For ISRG Stock

In conclusion, Intuitive Surgical’s performance across the parameters outlined above is as follows:

• Growth: Very Strong
• Profitability: Very Strong
• Financial Stability: Very Strong
• Downturn Resilience: Moderate
• Overall: Very Strong

Although Intuitive Surgical’s valuation is undeniably high, it’s crucial to recognize that the stock has historically commanded a premium. For context, its average price-to-sales ratio over the last five years is 19.5, with an average P/E ratio of 75.

In our opinion, this premium is warranted due to several factors: improving revenue growth and margins, a near-monopoly status in the robotic surgery sector, and a significant base of recurring revenue. For these reasons, we believe ISRG is an attractive stock to purchase at its present levels.

The primary risk is that concerns over tariffs in 2026 could discourage investors from paying an even higher multiple in the short term. However, for those with a 3-to-5-year investment outlook, we believe that the company’s solid fundamentals present a compelling opportunity.

If you’re still uneasy about the volatile nature of ISRG stock, the Trefis High Quality (HQ) Portfolio, featuring a selection of 30 stocks, boasts a history of comfortably outperforming its benchmark that encompasses all three indices – the S&P 500, S&P mid-cap, and Russell 2000. Why is that? Collectively, HQ Portfolio stocks have yielded superior returns with lower risk compared to the benchmark index; providing a more stable investment experience, as illustrated by HQ Portfolio performance metrics.