ISRG Technical Appendix: The model behind the rating, in figures

The ISRG research family (page counts are those of the approved PDF editions, which this site does not host):

• Deep Dive: A franchise worth owning at a price that asks for more than we can find (47 pages). Public preview; the Deep Dive page says how to read the full report.
• Research Note: The business is not the question, the price is (5 pages).
• Technical Appendix: The model behind the rating, in figures (14 pages).
• Learning Companion: How to read the Intuitive Surgical research (12 pages).

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Eight years of reported history, unit economics, annual schedules on all three paths, terminal economics, the equity bridge, the sensitivities and the challenged assumptions behind Blockhaven's values for Intuitive Surgical at the 11-02-2026 close of $436.87, where the Deep Dive rates the shares 1 / 5 POOR. The values are intrinsic values at the 11-02-2026 valuation date, from an explicit forecast to 2035 with a terminal value, and not a forecast of twelve-month price performance. Every value is conditional and unweighted.

How to read these tables

Revenue is built from procedures: procedures times instruments and accessories revenue per procedure give the recurring line, and systems and services follow procedures through ratios that fall as utilization rises. Free cash flow is after-tax operating profit plus depreciation, less gross investment (equipment purchases plus leased systems transferred from inventory) and less working capital, which leaves those transfers out so that each is counted once. It is discounted at 9.91%, the measured 4.91% Treasury ten-year par yield of 11-02-2026 plus a judged beta of 1.0 times a judged 5.0% equity risk premium, with mid-year timing from 09-30-2026, and the equity value is rolled forward to 11-02-2026, a present-value step to the valuation date and not a price at any later date. Share-based pay stays in as a cost. Amounts are millions of US dollars unless a row or column says otherwise. The 2026 row combines the reported first nine months with our fourth quarter; every later figure is a model output, not a company forecast or guidance. The evidence runs through 11-09-2026; the only item gathered after 11-07-2026 is the 11-09-2026 settled close, and the filings, the model, the valuation and the owner's disclosures are as of their earlier dates.

Since the valuation date

Every value in this appendix is a present value at the 11-02-2026 valuation date and has not been rolled forward or recalculated. The rows below set those values against the latest settled close, 11-09-2026 (the November 9, 2026 regular-session closing price), and a second table keeps the closes between and the ten-year Treasury par yield where we hold one. The discount rate the model uses was built on the 11-02-2026 yield and is unchanged. The price rose and the values did not move, so the gaps widened; the price is still above every value.

The closes are regular-session closing prices, adjusted for splits and not for dividends. The yields are the official Treasury par yield for the ten-year maturity; the table we hold ends at 11-06-2026, so no yield is shown for 11-09-2026. A fall of 5 basis points in the ten-year yield, the move between 11-02-2026 and 11-06-2026, the last date for which we hold a yield, would, taken alone and scaled from the one-point sensitivities below, lift the reference by about $1.28 to $1.80 per share. That is a scale and not a revaluation: the model's discount rate is still 9.91%.

Closes and yields by session

Market-implied reading at the two closes

The same measures at the 11-02-2026 close, where the rating was assessed, and at the 11-09-2026 settled close. The break-evens are solved again by the model's own routine at each price with the rest of the reference held; the values themselves are those of 11-02-2026 and the discount rate is unchanged.

Eight years of reported history, FY2018 to FY2025

Read from the annual reports and the SEC's structured data for the company. Amounts are millions of US dollars unless a row says otherwise; procedure counts, installed bases and placements are the company's approximate estimates; a dash marks a figure no captured filing states, which we do not estimate.

Revenue by type

Compound growth

Procedures, installed base and placements

Margins, earnings and shares

Cash flow, investment and the balance sheet

Return on invested capital

Adjusted operating income after the model's cash tax rate, over total equity including the noncontrolling interest less cash and investments at the year end; the company carries no debt.

Unit economics, FY2018 to FY2025

Our ratios from reported figures, not company measures: revenue per procedure and per average installed system. No filing reports the cost or margin of a system or Ion's revenue per procedure.

Assumptions by path

Inputs by path and year

The inputs that differ from path to path, by year. Everything else is the same on all three paths.

The reference path: revenue

The reference path: from operating profit to free cash flow

Year-by-year schedules on all three paths

Each row is a year; the right-hand column is the present value at 09-30-2026 of the free cash flow that enters the valuation. The price factor is the cumulative effect of announced cuts and erosion on revenue per procedure, with 100% meaning no reduction.

Reference

Downside

Upside

Terminal economics, first year after the forecast

The handover from 2035 to the terminal years

The last explicit year beside the first terminal year on each path, with the two multiples the terminal value implies.

From enterprise value to value per share

One input at a time

Each row moves one input of the reference path and holds the rest. These are sensitivities, not a range of outcomes and not probabilities.

Moving two inputs together

Value per share at the 11-02-2026 valuation date with the discount rate and da Vinci growth in every year from 2027 to 2035 moved together, the rest of the reference held. The last column is the conditional break-even: the growth shift at which the reference value equals the 11-02-2026 close at that row's rate. It is a combination that reconciles the cash flows with the price, not what the price requires.

What testing the model changed

An independent rebuild and a two-sided challenge of our assumptions changed three conventions before these values were set. Each step is applied in the order shown, so a step's size depends on the steps before it.

The challenged assumptions

The eight assumptions argued against in both directions before the values were set, with the effect of each end on value per share. The effects were measured on the reference as it stood then, before the corrections above, so they differ from the one-input sensitivities, which are measured on the corrected reference. The Ion row is a hypothetical stress: nobody reports that figure.

Capital allocation, FY2018 to FY2025

Where the cash came from and went over the eight fiscal years together, with the change in cash and investments measured over the same eight years. Systems moved from inventory to property are not an investing cash outflow but are a cost the free cash flow counts once.

Disclosure

The Blockhaven Rating is Blockhaven's own five-level assessment of risk-adjusted opportunity at a stated price and horizon. It is not individualized advice and it is not a recommendation to trade. The values in this report are conditional model outputs at a single date, are unweighted, and are not price targets.

Important disclosures

Blockhaven research is provided for general informational and educational purposes. It is not individualized investment advice and does not take into account any reader's financial circumstances, investment objectives, risk tolerance, tax situation or portfolio.

Nothing in this report is an offer or a solicitation to buy or sell a security or other financial instrument. Reading or accessing Blockhaven research does not by itself create an investment-advisory, fiduciary, brokerage or client relationship.

Investing involves risk, including the possible loss of principal. Scenario values, terminal values, valuation ranges, sensitivities and forward-looking assumptions are analytical tools, not guarantees or promises of future performance, and actual results may differ materially.

Blockhaven uses information from company filings, company publications, market-data providers and other sources it believes to be reliable, but that information may be incomplete, delayed, revised or incorrect.

Opinions, ratings and interpretations reflect Blockhaven's research judgment as of the report date and may change as new evidence becomes available.

Positions and conflicts

As of November 6, 2026, Blockhaven's owner held no shares, options, or other direct derivatives in Intuitive Surgical, Inc.; had no material positions in Intuitive Surgical, Inc. through entities the owner controls; and had no paid financial relationships with Intuitive Surgical, Inc.

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