Intuitive Surgical, Inc. (NASDAQ:ISRG) is underperforming the broader market, with shares declining by nearly 24% since the start of 2026. That underperformance is notable for investors because Intuitive’s operating performance has remained strong, and the company’s latest results show continued double-digit growth in procedures, revenue, and its installed base of surgical systems.
The question for investors, then, is not simply whether the stock has become cheaper. It is whether the decline has brought Intuitive’s valuation down enough to make its growth prospects attractive. But before we dive into the stock’s investment story, take a look at our insightful article on Intuitive Surgical (ISRG) Just Beat Earnings. Is the Stock Still Worth Paying a Premium? to truly understand the stock’s bull and bear case.
A Premium Valuation Still Leaves Little Room for Disappointment
Intuitive Surgical’s forward P/E is approximately 36.36x at a stock price of $391.95 as of October 5, according to Seeking Alpha. That is considerably higher than the valuations of companies such as Medtronic, which makes Intuitive a very different investment proposition. Investors are paying a substantial premium, around 96.85%, for the company’s growth and its position in robotic-assisted surgery.
For that premium to make sense, Intuitive needs to continue expanding its procedure volumes and installed base while converting that growth into earnings and cash flow. So far, there is evidence that it can. Read more about how companies like Medtronic compare with Intuitive in our insightful comparative article on Intuitive Surgical (ISRG) vs. Medtronic (MDT): Which MedTech Stock Looks Better Positioned for Growth?.
The Business Continues to Grow at a Rapid Pace
Intuitive’s second-quarter 2026 revenue increased 19% to $2.89 billion, while worldwide da Vinci and Ion procedures increased approximately 16% compared to the same period last year. Da Vinci procedures rose about 15%, while Ion procedures increased approximately 36%. The installed base is also expanding. Intuitive ended the quarter with 11,710 da Vinci systems, up 12% from a year earlier, while its Ion installed base reached 1,096 systems, representing a 21% increase.
The company placed 468 da Vinci systems during the quarter, including 246 da Vinci 5 systems, compared with 395 total da Vinci placements and 180 da Vinci 5 placements a year earlier. That suggests the newer da Vinci 5 platform is becoming an important part of the company’s expansion.
Intuitive expects this growth to continue, and it expects worldwide da Vinci procedure growth of approximately 13.5% to 15.5% for 2026, with management expecting growth near the midpoint of that range. We meticulously crafted a list of the 7 Best Pharma Stocks to Invest In Now. Access the complete list here.
The Risk Is Not Weak Growth, But It Is the Price of That Growth
This is what makes Intuitive Surgical, Inc. (NASDAQ:ISRG) different from Medtronic or Abbott. The company’s biggest problem is not that growth has disappeared; rather, the valuation already assumes substantial growth will continue. For more insight, read Abbott vs. Intuitive Surgical: Is Consistent Growth Better Than Premium Growth?
Intuitive’s second-quarter GAAP net income rose to $818 million, or $2.29 per diluted share, from $658 million, or $1.81 per diluted share, a year earlier. At the same time, Intuitive expects non-GAAP operating expenses to increase 11% to 13% in 2026 and sees tariffs reducing its gross margin by approximately one percentage point.
That means the valuation cannot be justified simply by pointing to procedure growth. Investors also need earnings to keep expanding at a pace capable of supporting the premium multiple. Read more about Intuitive’s bull and bear case here.
Does the Valuation Make Sense?
Intuitive Surgical’s roughly 36x forward valuation is expensive compared with more mature medical-device companies, but the premium reflects a business that is still producing double-digit procedure growth and expanding its installed base.
The stock’s 13% decline over the past year has made that premium less extreme than it was previously. However, it has not eliminated the central risk for investors, which is that Intuitive still needs to execute exceptionally well to justify what investors are paying for its future earnings.
If procedure growth remains around the low-to-mid teens and the company continues expanding its installed base and newer platforms, the premium could remain justified. If growth slows materially, however, the multiple could become a much bigger problem. For now, Intuitive Surgical, Inc. (NASDAQ:ISRG) looks less like a conventional value opportunity and more like a high-quality growth company whose recent share-price decline has improved the entry point without making the valuation cheap.
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This article is originally published at Insider Monkey.
