Robot use keeps compounding with 75% recurring sales. At 31.5 times 2027 profit, the price implies a slowdown I do not see.
Key points
- $1.80 billion of instrument sales in Q3 2026 grew 18% from a year ago on steady use.
- 351.6 million diluted shares in Q3 2026 fell after $2.94 billion of buybacks in the quarter.
- 14% to 15% da Vinci procedure growth guided for 2026 keeps double digit use intact.
The call
The market expects growth to fade after the quarter. At $407.99 today the stock pays 31.5 times my $12.94 of 2027 profit. That level implies procedure growth slipping near 10% in 2027.
Q3 revenue is three-quarters recurring use- Instruments and accessories$1.8059%
- Systems$0.7725%
- Services$0.4816%
Source: Oct 20 2026 8-K Exhibit 99.1, Q3 2026 revenue $3.05B.
Growth should stay stronger for longer. The base reached 12,094 systems in September 2026. That base grew 12% from a year ago with use above 10,000 procedures per day in the quarter.
Valuation
| Step | Figure |
|---|
| 2026 revenue | $12.00 billion |
| 2026 adjusted profit | $11.35 a share |
| 2027 adjusted profit | $12.94 a share |
| Multiple on 2027 profit | 38 times |
| 12-month target | $491.68 a share |
A 38 multiple, meaning price at 38 times profit, fits a debt free leader with 75% recurring sales in Q3 2026. The price implies fading growth while use and placements still expand. Upside of 21% in twelve months supports a buy rating.
Target rises with the multiple on FY27 profitSource: own arithmetic on $12.94 FY27 non-GAAP EPS; reference is verified price.
Risks
- Benign deferrals and coverage limits could cut U.S. use in 2027, seen in da Vinci growth below 13% for two quarters.
- Antitrust injunction terms could raise costs or curb sales in 2027, seen in the final court order and filings.
- Tariffs on Mexican and German supply could lower margin in 2026, seen in gross margin below 67% for two quarters.
What would change my mind
I would turn cautious if instrument sales per procedure fell for two quarters in 2027 while U.S. use also slowed.