QS Research · Michael Burry's Scion Capital analyst template · 2006
INTUITIVE SURGICAL INC (ISRG)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -36% · upside +37%
At $452.80 the market already pays 39.4x TTM EV/EBITDA (N26) for $3.88B EBITDA (N15); at that multiple the base value is about $452/share, so the base case is flat at 0%. A de-rating to 25x, still above SYK's 19.3x (S1), on the same TTM EBITDA gives $291/share, -36%, while holding 45x on EBITDA 20.5% higher gives $618/share, +37%; the asymmetry is roughly 1:1 and needs both the premium multiple and continued ~20% growth. The Q3 2026 GAAP EPS drop is a $450M antitrust charge (S5, S97), but planned 3-5% instrument price cuts through 2027 (S74) and cooling U.S. procedure growth (S87) are real operating headwinds. I would watch, not own: operating quality is high, but the price offers no margin of safety and the rule is not met.
Key numbers
- Share price: $452.80
- Market cap: $156.96B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $11.58B
- EV / EBITDA (TTM): 39.4x
- P/E (TTM): 53.1x
- Price / book: 9.82x
The 15 boxes
- ✓ 1. Long-form business notes
Intuitive Surgical sells robotic-assisted surgery systems, instruments and accessories, learning and support services, and digital tools; the latest 10-K describes a capital-system sale plus procedure-linked instruments/accessories and services. Revenue grew from $4.36B in FY2020 to $10.06B in FY2025, with operating income rising from $1.05B to $2.95B and operating cash flow from $1.48B to $3.03B; FY2025 domestic revenue was 68% of total. Between the FY2020 and latest 10-Ks, the platform line moved to fifth-generation da Vinci 5 and the narrative added Ion, My Intuitive+, 3D Models, and a Quintuple Aim framework.
- ✓ 2. Competitive advantage
The record supports a durable advantage, but one that is being priced against a widening field. Gross margin held between 65.6% and 67.5% every year FY2020-FY2025 (66.0% in FY2025) while revenue compounded roughly 18% a year to $10.06B and operating margin rose from 24.1% to 29.3%, and the moat rests on a 5,600+ patent portfolio as of Dec 31, 2025 and a chipped-instrument razor-blade model inside a systems/instruments/learning/services ecosystem. Against that, the 10-K names more than a dozen robotic entrants plus Johnson & Johnson and Medtronic as larger, well-established rivals, expects increasing competition in China, and warns of pricing pressure; risk factors add third-party servicing and remanufactured instruments as a direct attack on the instrument annuity, and flag that gross margins will vary over time.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 22% to $3.05B, with da Vinci procedures +14% and Ion procedures +31%; placements were 546 da Vinci systems, including 315 da Vinci 5. GAAP net income attributable was $523M, or $1.49 per diluted share, after a $450M pre-tax antitrust settlement charge; non-GAAP net income attributable was $1.05B, or $3.00. Cash and investments ended at $6.80B after a $2.94B buyback, and FY2026 guidance is numeric.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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