Discounted Cash Flow (DCF) Analysis Unlevered

Intuitive Surgical Inc. (ISRG)

$688.94

3.5 (+0.51%)

Operating Data

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Revenue	2,265.10	2,131.69	2,384.29	2,704.26	3,128.83	3,724.25	3,754.41	4,097.94	4,472.90	4,882.18	5,328.89
Revenue (%)
EBITDA	919.86	585.36	803.03	1,001.39	1,132.64	1,331.05	1,596.75	1,482.64	1,618.30	1,766.37	1,927.99
EBITDA (%)
EBIT	852.58	544.86	739.85	945.14	1,054.73	1,199.58	1,374.49	1,356.42	1,480.53	1,616.00	1,763.86
EBIT (%)
Depreciation	67.27	40.50	63.18	56.25	77.91	131.47	222.26	126.22	137.77	150.37	164.13
Depreciation (%)

Balance Sheet Data

Year A/P	2013 Projected	2014 Projected	2015 Projected	2016 Projected	2017 Projected	2018 Projected	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Total Cash	1,403.46	1,232.54	1,559.80	2,554.72	1,960.53	3,063.19	3,221.66	2,987.81	3,261.20	3,559.59	3,885.30
Total Cash (%)
Account Receivables	301.48	315.06	394.36	430.25	511.88	682.28	645.38	658.13	718.35	784.08	855.82
Account Receivables (%)
Inventories	179.62	181.62	167.85	182.27	241.23	408.92	595.45	379.47	414.19	452.09	493.46
Inventories (%)
Accounts Payable	46.21	61.61	52.69	68.42	82.60	100.55	123.52	106.96	116.74	127.42	139.08
Accounts Payable (%)
Capital Expenditure	104.65	105.52	81.07	53.81	190.55	187.33	425.75	219.24	239.30	261.20	285.10
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 688.94
Diluted Shares Outstanding	119.00
Cost of Debt
Tax Rate	8.18
After-tax Cost of Debt	-0.36
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.49
Total Debt	-
Total Equity	81,983.86
Total Capital	81,983.86
Debt Weighting	0.00
Equity Weighting	100.00
Wacc

Build Up Free Cash

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Revenue	2,265.10	2,131.69	2,384.29	2,704.26	3,128.83	3,724.25	3,754.41	4,097.94	4,472.90	4,882.18	5,328.89
EBITDA	919.86	585.36	803.03	1,001.39	1,132.64	1,331.05	1,596.75	1,482.64	1,618.30	1,766.37	1,927.99
EBIT	852.58	544.86	739.85	945.14	1,054.73	1,199.58	1,374.49	1,356.42	1,480.53	1,616.00	1,763.86
Tax Rate	-9.55%	23.72%	22.37%	24.97%	39.81%	11.85%	8.18%	17.34%	17.34%	17.34%	17.34%
EBIAT	934.01	415.64	574.32	709.14	634.86	1,057.45	1,262.04	1,121.28	1,223.88	1,335.87	1,458.10
Depreciation	67.27	40.50	63.18	56.25	77.91	131.47	222.26	126.22	137.77	150.37	164.13
Accounts Receivable	-	-13.58	-79.30	-35.89	-81.63	-170.41	36.90	-12.75	-60.22	-65.73	-71.74
Inventories	-	-2.00	13.77	-14.41	-58.97	-167.69	-186.53	215.98	-34.72	-37.90	-41.37
Accounts Payable	-	15.40	-8.91	15.73	14.18	17.95	22.97	-16.56	9.79	10.68	11.66
Capital Expenditure	-	-0.87	24.45	27.25	-136.73	3.22	-238.42	206.51	-20.06	-21.90	-23.90
UFCF	1,001.29	455.09	587.51	758.07	449.62	871.99	1,119.22	1,640.68	1,256.43	1,371.39	1,496.88
WACC
PV UFCF								1,471.59	1,010.80	989.59	968.82
SUM PV UFCF											5,490.59

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.49
Free cash flow (t + 1)	1,556.75
Terminal Value	20,784.41
Present Value of Terminal Value	12,065.86

Intrinsic Value

Enterprise Value	17,556.44
Net Debt	-3,221.66
Equity Value	20,778.11
Shares Outstanding	119.00
Equity Value Per Share	174.61

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