Intuitive Surgical Inc. is a company that develops and markets a robotic system for assisting minimally invasive surgery. With over 8,000 installations worldwide, the company has established itself as a leader in the field of medical innovation. However, the question remains: is the stock of Intuitive Surgical undervalued?
According to GuruFocus, a proprietary measure known as the GF Value suggests that Intuitive Surgical’s stock is indeed modestly undervalued. The stock’s current price of $302.05 per share and a market cap of $106.10 billion indicate that the stock is trading below its fair value. This undervaluation implies that the long-term return of Intuitive Surgical’s stock may be higher than its business growth.
In addition to the GF Value, it is essential to consider the company’s financial strength. Intuitive Surgical boasts a cash-to-debt ratio of 10,000, ranking better than 99.88% of companies in the Medical Devices & Instruments industry. The overall financial health of the company is impressive, with a score of 10 out of 10.
Furthermore, profitability is a crucial factor in evaluating the value of a company. Intuitive Surgical has been consistently profitable over the past ten years, with a current operating margin of 24.34%, ranking better than 87.85% of companies in the industry. The company’s profitability score is also 10 out of 10.
When considering growth, it is important to note that Intuitive Surgical’s 3-year average revenue growth rate is better than 61.23% of companies in the industry. However, its 3-year average EBITDA growth rate ranks worse than 53.66% of companies. This implies that while the company has shown strong revenue growth, its profitability growth has been slower.
Ultimately, the return on invested capital (ROIC) versus the weighted average cost of capital (WACC) is another indicator of profitability. Intuitive Surgical’s ROIC over the past 12 months was 16.91, while its WACC was 14.12.
In conclusion, Intuitive Surgical appears to be modestly undervalued, considering its strong financial condition and robust profitability. However, its growth rate could be improved. Investors interested in high-quality companies that may deliver above-average returns should consider exploring Intuitive Surgical further.
– GuruFocus: https://www.gurufocus.com/
– GuruFocus High Quality Low Capex Screener: https://www.gurufocus.com/screener/high_quality_low_capex.php
– Intuitive Surgical 30-Year Financials: *link not provided*