Valuing Intuitive Surgical, Inc. (ISRG)

Interestingly, analyst estimates fall in line with the assumed growth rate by the market. Of the analysts compiled by Yahoo! Finance, they expect 13.8% EPS growth per annum over the next five years.

With the analyst expectations already priced into the stock based on this reverse DCF valuation, it’s no surprise that analysts, on average, have a hold rating on the stock.

How to think about Intuitive Surgical stock

When it’s all said and done, the consensus here is that the stock is fairly valued. Or, in analyst lingo, the stock is a hold. While I often don’t mind picking up shares of a business when it is fairly valued if it has enduring characteristics, Intuitive Surgical just doesn’t pass through my filters. Sure, the company basically has no competitors. But its dependence on the da Vinci requires me to demand that 25% margin of safety.

Yes, my estimates may be too conservative. But I’d prefer to err on the side of conservatism than the side of aggressiveness.

What do you think? Is Intuitive Surgical a buy, sell, or hold?

The article Valuing Intuitive Surgical originally appeared on and is written by Daniel Sparks.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Intuitive Surgical.

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