ISRG
Intuitive Surgical, Inc.
$438.10
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 25.8% above fair value
You pay
$438.10
Bear
$215.55
Fair
$348.14
Bull
$506.86
Bear
$215.55
-50.8%
11% stage 1 growth, 12% discount
Fair
$348.14
-20.5%
18% stage 1 growth, 12% discount
Bull
$506.86
+15.7%
24% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
41%
Implied Market Multiple
78.7x
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 $622.60 from 55 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $348.14 per share.
Warnings
Wall Street's average price target is $622.60 (from 55 analysts). Our estimate is 68% 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