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Intuitive Surgical, Inc. (NASDAQ:ISRG) saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Intuitive Surgical’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Intuitive Surgical
What's the opportunity in Intuitive Surgical?
According to my valuation model, Intuitive Surgical seems to be fairly priced at around 18.47% above my intrinsic value, which means if you buy Intuitive Surgical today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $244.67, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Intuitive Surgical’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What kind of growth will Intuitive Surgical generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 30% over the next couple of years, the future seems bright for Intuitive Surgical. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? ISRG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on ISRG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.