Is Intuitive Surgical, Inc. overvalued or undervalued?

As of 5 November 2024, Intuitive Surgical, Inc. has moved from an expensive to a very expensive valuation grade. The company is currently considered overvalued based on its high valuation metrics. The P/E ratio stands at 80, significantly above the industry average of approximately 73.45. Additionally, the EV to EBITDA ratio is 66.13, which is also higher than its peers, such as Abbott Laboratories at 25.60 and Medtronic Plc at 15.23.
With a PEG ratio of 3.60, Intuitive Surgical's growth expectations do not justify its high price relative to earnings, indicating a potential overvaluation. The company's return on capital employed (ROCE) is 19.51%, and return on equity (ROE) is 14.61%, which are respectable but not sufficient to support the current valuation levels. Recent stock performance shows that Intuitive Surgical has underperformed the S&P 500 over the past month, further reinforcing the notion that the stock may be overvalued in the current market environment.