ISRG
Intuitive Surgical, Inc.
$337.50
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 9.3% above fair value
You pay
$337.50
Bear
$191.15
Fair
$308.73
Bull
$449.48
Bear
$191.15
-43.4%
11% stage 1 growth, 12% discount
Fair
$308.73
-8.5%
18% stage 1 growth, 12% discount
Bull
$449.48
+33.2%
24% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
41%
Implied Market Multiple
60.0x
Market is pricing in (growth)
25.8%
vs 18.2% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $510.00 from 56 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $308.73 per share.
Warnings
Wall Street's average price target is $510.00 (from 56 analysts). Our estimate is 61% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions