Buying the Dip in Intuitive Surgical: Weak Guidance Masks Competitive Strength

The recent market reaction to Intuitive Surgical’s earnings update presents an intriguing buying opportunity for long-term investors willing to ride out near-term volatility. While the company’s fourth quarter 2025 results were solid, Wall Street’s focus shifted to disappointing 2026 guidance—and this dip in share price may be precisely where value-conscious investors should be shopping.

Market Concerns Miss the Bigger Picture

Intuitive Surgical’s Q4 2025 performance was nothing short of respectable. The company posted $2.87 billion in revenue, representing 19% year-over-year growth, while da Vinci procedure volume surged 17%. Earnings per share reached $2.21, up 17.6% from the prior year. By most standards, these are numbers worth celebrating.

Yet the market fixated on the company’s 2026 guidance, which projected da Vinci procedure volume growth between 13% and 15%—a meaningful deceleration from the 18% growth achieved in 2025. Since procedure volume drives the demand for Intuitive Surgical’s high-margin instruments and accessories, investors rightly viewed this slowdown as a headwind. The company faces additional pressure from geopolitical trade tensions and a challenging healthcare landscape.

The stock’s decline on these concerns may be overdone, however. Yes, growth will moderate, but the narrative that Intuitive Surgical’s best days are behind it doesn’t hold up under scrutiny.

Why the da Vinci Moat Remains Formidable

Intuitive Surgical dominates the robotic-assisted surgery market, yet this market remains significantly underpenetrated globally. The runway for adoption is substantial, particularly as emerging markets begin embracing minimally invasive techniques. Beyond raw growth, the company benefits from structural competitive advantages that are difficult to replicate.

High switching costs and steep barriers to entry protect Intuitive Surgical’s position. The company has accumulated decades of real-world surgical data demonstrating improved patient outcomes with da Vinci systems—a moat that competitors cannot easily overcome. As the world’s population ages and demand for surgical procedures increases, Intuitive Surgical stands positioned to capture a disproportionate share of this growth.

These long-term tailwinds are not trivial. They suggest that today’s temporary disappointment in near-term guidance masks a fundamentally sound business model.

The Hidden Value in Today’s Dip

Valuation deserves careful consideration. At 54 times forward earnings, Intuitive Surgical trades at a significant premium to the 18.6x multiple typical for healthcare stocks. However, when adjusted for expected growth rates, the company’s price-to-earnings-to-growth (PEG) ratio of 3.2 tells a more balanced story.

While a PEG of 3.2 remains above the typically “cheap” threshold of 2.0, it’s not prohibitively expensive for a company with Intuitive Surgical’s competitive advantages, market position, and long-term growth prospects. The dip in the stock price has narrowed the valuation gap, making entry points here more attractive than they were months ago.

For investors with a multi-year horizon, the combination of a still-expanding market, unmatched competitive positioning, and improving—if not cheap—valuations creates a compelling case. The medical device giant will likely experience volatility in the near term as the market digests slower growth expectations. But over a longer time horizon, Intuitive Surgical remains a quality business worth owning at these depressed valuations.