Intuitive Surgical scores 96 for management and 99 for moat. The management score rests on a return on invested capital of 13.7% and a gross margin of 66.0% — figures that describe a business turning capital into profit efficiently. Debt sits at 0.02x equity.
Three independent anchors set the price worth paying. Growth is modelled at 15.0% a year, below the 18.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 30.0x. That produces an intrinsic value of $263.70, a 10-CAP price of $93.94 and a payback time price of $148.29, with the value zone set at the highest of the three, $148.29. Today's price of $401.24 is 171% above it.
A wonderful business at the wrong price is still the wrong price. Intuitive Surgical scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $401.24 |
| Market cap | $141.7B |
| P/E ratio | 45.6x |
| Return on invested capital | 13.7% |
| Gross margin | 66.0% |
| Debt to equity | 0.02x |
| Free cash flow yield | 1.2% |
| Growth rate used | 15.0% |
| Growth rate measured | 18.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| Becton Dickinson (BDX) | 39 | $109.27 |
| ResMed (RMD) | 91 | $283.19 |
| Medline Inc-Cl A (MDLN) | 64 | $25.44 |
| West Pharmaceutical Services (WST) | 73 | $79.25 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Intuitive Surgical rather than accepting ours.