DCF Studio

    ISRG · NMS · Healthcare

    Intuitive Surgical, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 125.51

    Market price

    USD 436.87

    Implied upside

    -71.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 10.5% of revenue against depreciation of 6.2%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 41.0x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 125.51-71.3%
    Exit multiple
    USD 224.43-48.6%
    Market price
    USD 436.87

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 11.9bnUSD 13.3bnUSD 14.8bnUSD 16.2bnUSD 17.5bnUSD 18.8bnUSD 19.9bnUSD 20.9bnUSD 21.6bnUSD 22.2bn+7.1%
    EBITUSD 3.2bnUSD 3.6bnUSD 4.0bnUSD 4.3bnUSD 4.7bnUSD 5.0bnUSD 5.4bnUSD 5.6bnUSD 5.8bnUSD 6.0bn+7.1%
    NOPATUSD 2.8bnUSD 3.1bnUSD 3.5bnUSD 3.8bnUSD 4.1bnUSD 4.4bnUSD 4.7bnUSD 4.9bnUSD 5.1bnUSD 5.2bn+7.1%
    Add depreciation & amortisationUSD 744.5mUSD 832.8mUSD 921.8mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bn+7.1%
    Less capital expenditureUSD -1.3bnUSD -1.4bnUSD -1.6bnUSD -1.7bnUSD -1.8bnUSD -2.0bnUSD -2.1bnUSD -2.2bnUSD -2.3bnUSD -2.3bn+7.0%
    Capex, % of revenue10.5%10.5%10.5%10.5%10.5%10.5%10.5%10.5%10.5%10.4%-
    Less increase in working capitalUSD -563.0mUSD -427.8mUSD -431.3mUSD -425.1mUSD -408.4mUSD -380.5mUSD -341.3mUSD -291.4mUSD -231.7mUSD -163.6m-12.8%
    Free cashflow to firmUSD 1.7bnUSD 2.1bnUSD 2.4bnUSD 2.7bnUSD 3.0bnUSD 3.2bnUSD 3.5bnUSD 3.7bnUSD 3.9bnUSD 4.1bn+10.1%
    Discount factor0.95190.86250.78140.70800.64150.58120.52660.47720.43230.3917-
    Present valueUSD 1.6bnUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 1.9bnUSD 1.9bnUSD 1.8bnUSD 1.8bnUSD 1.7bnUSD 1.6bn-
    Present Value Of The ForecastUSD 17.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.294Reported 1.439, pulled toward 1.0 (Blume)
    Cost of equity10.37%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 154.3bn100.0% of capital
    Total debtUSD 0.000.0% of capital, book value as a proxy
    Tax rate12.9%Effective, capped at statutory
    WACC10.37%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 125.51

    55% of EV

    Forecast FCFF, final year
    USD 4.1bn
    Capex at depreciation, working capital in reinvestment
    USD 5.3bn
    Less reinvestment at g/ROIC (20.1% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 4.2bn
    ROIC (reported)
    12.5%
    Terminal value, undiscounted
    USD 55.3bn
    Terminal value, discounted
    USD 21.7bn
    Enterprise value
    USD 39.6bn
    Less net debt
    USD -5.9bn
    Equity value
    USD 45.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 224.43

    76% of EV

    Terminal value, undiscounted
    USD 146.9bn
    Terminal value, discounted
    USD 57.6bn
    Enterprise value
    USD 75.5bn
    Less net debt
    USD -5.9bn
    Equity value
    USD 81.4bn

    Spread between methods: 57%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.37%162.28163.81165.82168.44171.84
    9.37%141.89142.18142.68143.45144.54
    10.37%126.20125.81125.51125.31125.25
    11.37%113.79113.02112.27111.57110.91
    12.37%103.74102.76101.78100.8199.83

    Outlined: this model. Green text: above today's price of 436.87. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year17.4%8.2%26.6%
    Discount rate-10.4%4.7%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.