Core Viewpoint - Intuitive Surgical's stock has underperformed in 2023, dropping 16% compared to the S&P 500's 10% increase, primarily due to management's concerns over potential tariffs affecting performance in 2026 [2][3] Financial Performance - Intuitive Surgical's revenues have shown significant growth, increasing by 20.8% from $7.6 billion to $9.1 billion in the last 12 months, compared to a 5.1% growth for the S&P 500 [6] - The company has an average top-line growth rate of 15.4% over the last three years, significantly higher than the S&P 500's 5.3% [6] - Quarterly revenues rose by 21.4% to $2.4 billion in the most recent quarter from $2.0 billion a year earlier, while the S&P 500 saw a 6.1% improvement [6] Profitability Metrics - Intuitive Surgical's operating income over the last four quarters was $2.6 billion, with an operating margin of 28.8%, compared to 18.6% for the S&P 500 [14] - The company's net income for the last four quarters was also $2.6 billion, demonstrating a net income margin of 28.5%, significantly higher than the S&P 500's 12.7% [14] - Intuitive Surgical's price-to-earnings (P/E) ratio stands at 61.0, compared to the S&P 500's 23.9, indicating a high valuation relative to the market [6] Financial Stability - The balance sheet of Intuitive Surgical appears robust, with no debt and cash (including cash equivalents) amounting to $5.3 billion out of total assets of $20 billion, resulting in a cash-to-assets ratio of 26.4% [14] - The company's price-to-sales (P/S) ratio is 17.4, compared to 3.3 for the S&P 500, reflecting a premium valuation [6] Market Position and Outlook - Intuitive Surgical is perceived to have a near-monopoly status in the robotic surgery sector, which supports its premium valuation [11] - Despite high valuation metrics, the company's improving revenue growth and margins justify the premium, making it an attractive investment opportunity at current levels [11][12]