Intuitive Surgical

Methodology

Intuitive Surgical's robotic surgery platform generates highly predictable earnings from recurring instrument and service revenue on its installed base of da Vinci systems. The company's razor-razorblade model creates exceptional visibility. This calculation works very well given the growing installed base driving consistent double-digit earnings growth from procedure volumes and instrument sales.

Methodology

Intuitive Surgical typically commands premium PEG ratios reflecting its surgical robotics monopoly, recurring revenue model, and long runway for robotic surgery adoption. The company's network effects and switching costs justify high multiples. Compare to other medical device companies to assess whether Intuitive's platform dominance and procedure growth potential warrant its substantial valuation premium.

Methodology

Intuitive Surgical does not pay dividends, reinvesting all capital in R&D for new surgical applications, international expansion, and ecosystem development. Management prioritizes innovation and market development. Total return depends entirely on Intuitive's ability to expand robotic surgery adoption across specialties and geographies while maintaining dominant market position.