Home > Comparison > Healthcare > ISRG vs RMD
The strategic rivalry between Intuitive Surgical, Inc. and ResMed Inc. shapes innovation within the healthcare instruments and supplies sector. Intuitive Surgical operates as a capital-intensive leader specializing in advanced minimally invasive surgical systems. In contrast, ResMed focuses on high-margin medical devices and cloud-based respiratory care solutions. This analysis pits surgical robotics against integrated respiratory care, aiming to identify which model offers superior risk-adjusted returns for a diversified portfolio in today’s evolving healthcare landscape.
Table of contents
Companies Overview
Intuitive Surgical and ResMed are key players shaping the medical instruments and healthcare technology markets.
Intuitive Surgical, Inc.: Pioneer in Minimally Invasive Surgery
Intuitive Surgical dominates the market for minimally invasive surgical systems, generating revenue primarily through its da Vinci Surgical System and related instruments. In 2026, the company focused on expanding its product portfolio beyond surgery with the Ion endoluminal system, aiming to enhance diagnostic procedures and integrate digital capabilities for hospital efficiency.
ResMed Inc.: Leader in Respiratory Care and Health Tech
ResMed excels in respiratory care devices and cloud-based healthcare software, serving hospitals, sleep clinics, and home healthcare markets worldwide. Its 2026 strategy emphasized software solutions like AirView and myAir, improving patient engagement and remote monitoring, while expanding its footprint in out-of-hospital care management through SaaS offerings.
Strategic Collision: Similarities & Divergences
Both companies innovate in medical instruments but diverge sharply in approach: Intuitive Surgical pursues a high-tech surgical ecosystem, while ResMed blends hardware with cloud-based software services for chronic care management. They compete indirectly for healthcare providers’ budgets but fight for differing market needs—surgical precision versus respiratory and chronic care technology. Their investment profiles contrast as Intuitive Surgical bets on cutting-edge surgical robotics, while ResMed focuses on scalable software-driven healthcare solutions.
Income Statement Comparison
The following data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Intuitive Surgical, Inc. (ISRG) | ResMed Inc. (RMD) |
|---|---|---|
| Revenue | 10.06B | 5.15B |
| Cost of Revenue | 3.41B | 2.09B |
| Operating Expenses | 3.71B | 1.37B |
| Gross Profit | 6.66B | 3.05B |
| EBITDA | 3.31B | 1.91B |
| EBIT | 3.31B | 1.68B |
| Interest Expense | 0 | 12.6M |
| Net Income | 2.86B | 1.40B |
| EPS | 8 | 9.55 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company runs a more efficient and profitable corporate engine through recent financial performance.
Intuitive Surgical, Inc. Analysis
Intuitive Surgical’s revenue climbed steadily from $5.7B in 2021 to $10.1B in 2025, showing robust growth. Its gross margin remains strong at 66.1%, indicating effective cost control. The net margin held steady near 28.4%, reflecting consistent profitability. In 2025, operating income surged 41%, signaling accelerating efficiency and solid momentum.
ResMed Inc. Analysis
ResMed’s revenue rose from $3.2B in 2021 to $5.1B in 2025, demonstrating healthy expansion. Gross margin at 59.4% is slightly lower but still favorable. Net margin improved to 27.2%, boosted by disciplined expense management. The company posted a 28% EBIT increase in 2025, highlighting strong operational leverage and improving profitability.
Margin Dominance vs. Earnings Momentum
Intuitive Surgical outpaces ResMed in revenue scale and margin robustness, boasting a superior gross margin and higher absolute profits. ResMed, however, exhibits faster net income growth and margin expansion over the period. For investors, Intuitive Surgical offers greater scale and margin power, while ResMed presents a compelling growth trajectory with improving efficiency.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose underlying fiscal health, valuation premiums, and capital efficiency for Intuitive Surgical and ResMed:
| Ratios | Intuitive Surgical (ISRG) | ResMed (RMD) |
|---|---|---|
| ROE | 14.13% (2024) | 23.47% (2025) |
| ROIC | 11.99% (2024) | 19.56% (2025) |
| P/E | 79.82x (2024) | 27.02x (2025) |
| P/B | 11.28x (2024) | 6.34x (2025) |
| Current Ratio | 4.07 (2024) | 3.44 (2025) |
| Quick Ratio | 3.22 (2024) | 2.53 (2025) |
| D/E | 0.01 (2024) | 0.14 (2025) |
| Debt-to-Assets | 0.78% (2024) | 10.42% (2025) |
| Interest Coverage | 0 (2024) | 133.66x (2025) |
| Asset Turnover | 0.44 (2024) | 0.63 (2025) |
| Fixed Asset Turnover | 1.75 (2024) | 7.16 (2025) |
| Payout Ratio | 0% (2024) | 22.19% (2025) |
| Dividend Yield | 0% (2024) | 0.82% (2025) |
| Fiscal Year | 2024 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios serve as a company’s DNA, uncovering hidden risks and revealing operational excellence that raw numbers alone cannot show.
Intuitive Surgical, Inc.
Intuitive Surgical posts a strong net margin of 28.38%, signaling operational efficiency. However, its ROE and ROIC readings are absent, and the P/E ratio at 70.78 signals an expensive valuation. The company returns no dividends, instead channeling funds into robust R&D efforts, dedicating over 13% of revenue to innovation.
ResMed Inc.
ResMed demonstrates solid profitability with a 27.22% net margin, a 23.47% ROE, and 19.56% ROIC, indicating efficient capital use. Its P/E ratio of 27.02 is more moderate but still somewhat stretched. The firm pays a modest dividend yield of 0.82%, balancing shareholder returns with growth investments.
Premium Valuation vs. Operational Safety
Intuitive Surgical’s premium valuation contrasts with ResMed’s balanced profitability and shareholder returns. ResMed offers a better risk-reward balance through solid returns and moderate valuation. Investors favoring growth with income might prefer ResMed, while those accepting valuation risk for innovation should watch Intuitive Surgical closely.
Which one offers the Superior Shareholder Reward?
Intuitive Surgical (ISRG) pays no dividends, focusing on reinvesting its high free cash flow into R&D and growth, while ResMed (RMD) offers a modest 0.82% dividend yield with a sustainable payout ratio around 22%. RMD complements dividends with significant share buybacks, leveraging strong free cash flow of 11.3B per share. ISRG’s absence of buybacks or dividends shifts value creation to capital reinvestment, yet its sky-high P/E near 80 signals rich growth expectations. I see RMD’s balanced distribution via dividends and buybacks as more prudent and sustainable in 2026, delivering superior total shareholder returns compared to ISRG’s growth-at-all-costs model.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Intuitive Surgical, Inc. and ResMed Inc., highlighting their strategic financial strengths and weaknesses:
ResMed displays a balanced, high-performing profile with strong DCF, ROE, and ROA scores, reflecting superior profitability and cash flow generation. Intuitive Surgical, conversely, relies on a moderate DCF score but suffers from weak returns and valuation metrics. ResMed’s moderate debt-to-equity score suggests prudent leverage management, while Intuitive’s high leverage risk and valuation concerns mark it as more vulnerable. Overall, ResMed dominates with a robust and diversified financial profile.
Bankruptcy Risk: Solvency Showdown
ResMed’s Altman Z-Score of 12.9 versus Intuitive Surgical’s 50.8 signals both firms reside comfortably in the safe zone, implying very low bankruptcy risk in this cycle:
Financial Health: Quality of Operations
ResMed’s Piotroski F-Score of 7 versus Intuitive Surgical’s 5 highlights stronger operational quality and financial health. ResMed shows fewer red flags, indicating superior internal controls and profitability metrics:
How are the two companies positioned?
This section dissects ISRG and RMD’s operational DNA by comparing their revenue distribution and internal strengths and weaknesses. The goal is to confront their economic moats to identify the most resilient, sustainable competitive advantage in today’s market.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Intuitive Surgical and ResMed diversify their income streams and reveals their primary sector bets:
Intuitive Surgical anchors revenue in Instruments and Accessories with $5.08B, dwarfing Services at $1.31B and Systems at $1.97B. This indicates a moderate diversification but a clear reliance on surgical instruments. ResMed, with $4.10B in Sleep and Respiratory and $584M in Software as Service, shows less diversification and a strong concentration in sleep-related products. Intuitive’s mix suggests ecosystem lock-in, while ResMed faces concentration risk from heavy reliance on one segment.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of Intuitive Surgical, Inc. and ResMed Inc.:
Intuitive Surgical, Inc. Strengths
- High net margin at 28.38%
- Favorable debt-to-assets ratio at 0%
- Infinite interest coverage indicates strong solvency
- Diverse revenue streams from instruments, services, and systems
ResMed Inc. Strengths
- Strong profitability with net margin 27.22% and ROE 23.47%
- Favorable ROIC at 19.56% above WACC 7.81%
- Solid liquidity with quick ratio 2.53
- Diverse revenue from sleep, respiratory, and SaaS segments
- Significant global presence with 1.7B global revenue
Intuitive Surgical, Inc. Weaknesses
- Unfavorable ROE and ROIC at 0%
- High P/E ratio at 70.78 suggests overvaluation
- Poor liquidity: zero current and quick ratios
- Low asset turnover indicates inefficient asset use
- No dividend yield
ResMed Inc. Weaknesses
- Unfavorable P/E of 27.02 and high PB of 6.34
- Current ratio 3.44 flagged unfavorable despite strong quick ratio
- Dividend yield low at 0.82%
- Moderate asset turnover at 0.63
Intuitive Surgical shows strong profitability and solvency but suffers from poor returns on capital and liquidity concerns. ResMed balances robust profitability, capital efficiency, and global diversification with some valuation and liquidity caveats. Each company must address its weaknesses to sustain competitive advantage.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat protects long-term profits from relentless competition and market pressure. Only it can shield sustainable value creation:
Intuitive Surgical, Inc.: Precision Robotics Moat
Intuitive Surgical’s moat relies on intangible assets and high switching costs embedded in its da Vinci system. Its 2025 EBIT margin of 32.9% reflects margin stability. Expansion into diagnostic robotics (Ion system) may deepen this moat but rising competition and declining ROIC trend pose risks.
ResMed Inc.: Integrated Care Ecosystem Moat
ResMed’s moat stems from network effects and SaaS integration in respiratory care. It compels customer lock-in with cloud-based monitoring tools. Its ROIC exceeds WACC by 11.7%, showing efficient capital use and growing profitability. Continued software expansion fuels durable competitive strength in 2026.
Intangible Assets vs. Network-Enabled Integration
ResMed exhibits a wider, more durable moat evidenced by growing ROIC and seamless software-hardware synergy. Intuitive Surgical’s intangible asset moat is challenged by declining ROIC, making ResMed better positioned to defend and expand market share.
Which stock offers better returns?
The past year shows notable gains for both Intuitive Surgical, Inc. and ResMed Inc., with distinct trading volumes and shifting momentum in recent months.
Trend Comparison
Intuitive Surgical’s stock rose 28.7% over the past year, marking a bullish trend despite recent deceleration and an 8.2% dip since November 2025.
ResMed’s stock gained 37.1% in the same period, maintaining a bullish trend with deceleration but showing a 5.7% positive surge in recent months.
ResMed outperformed Intuitive Surgical overall, delivering the highest market returns and stronger recent price momentum.
Target Prices
Analysts present a cautiously optimistic consensus on Intuitive Surgical and ResMed’s valuations.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Intuitive Surgical, Inc. | 550 | 750 | 641.25 |
| ResMed Inc. | 265 | 345 | 295.88 |
The target consensus for Intuitive Surgical stands roughly 27% above its current price of $504, signaling moderate upside. ResMed’s consensus target is about 14% higher than its current $258, reflecting steady growth expectations.
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How do institutions grade them?
Intuitive Surgical, Inc. Grades
These are the latest institutional grades assigned to Intuitive Surgical, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Freedom Capital Markets | Upgrade | Buy | 2026-01-27 |
| Barclays | Maintain | Overweight | 2026-01-26 |
| Bernstein | Maintain | Outperform | 2026-01-23 |
| Citigroup | Maintain | Neutral | 2026-01-23 |
| Evercore ISI Group | Maintain | In Line | 2026-01-23 |
| BTIG | Maintain | Buy | 2026-01-23 |
| Piper Sandler | Maintain | Overweight | 2026-01-23 |
| Bernstein | Maintain | Outperform | 2026-01-09 |
| Barclays | Maintain | Overweight | 2026-01-07 |
| BTIG | Maintain | Buy | 2026-01-07 |
ResMed Inc. Grades
These are the latest institutional grades assigned to ResMed Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Equal Weight | 2026-01-30 |
| RBC Capital | Maintain | Outperform | 2026-01-30 |
| Stifel | Maintain | Hold | 2026-01-30 |
| Piper Sandler | Maintain | Neutral | 2026-01-30 |
| Stifel | Maintain | Hold | 2025-12-18 |
| Baird | Downgrade | Neutral | 2025-12-16 |
| Baird | Maintain | Outperform | 2025-11-03 |
| RBC Capital | Maintain | Outperform | 2025-10-31 |
| Keybanc | Maintain | Overweight | 2025-10-31 |
| Mizuho | Maintain | Outperform | 2025-10-31 |
Which company has the best grades?
Intuitive Surgical, Inc. consistently receives higher grades such as Buy and Outperform from multiple firms. ResMed’s grades are more mixed, with frequent Holds and Neutral ratings. Higher grades for Intuitive Surgical may indicate stronger institutional confidence, potentially impacting investor sentiment.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing Intuitive Surgical, Inc. and ResMed Inc. in the 2026 market environment:
1. Market & Competition
Intuitive Surgical, Inc.
- Faces intense competition in robotic surgery, with innovation pace putting pressure on market share.
ResMed Inc.
- Competes broadly in sleep and respiratory care, with strong SaaS integration enhancing competitive moat.
2. Capital Structure & Debt
Intuitive Surgical, Inc.
- Virtually no debt, strong interest coverage but weak liquidity ratios raise operational risk concerns.
ResMed Inc.
- Maintains low debt-to-equity at 0.14, strong coverage ratio, but current ratio above industry average signals possible capital inefficiency.
3. Stock Volatility
Intuitive Surgical, Inc.
- Beta at 1.67 indicates high volatility, increasing market risk for investors.
ResMed Inc.
- Beta at 0.88 suggests lower volatility, offering more stable stock performance in turbulent markets.
4. Regulatory & Legal
Intuitive Surgical, Inc.
- Surgical device regulations and approvals remain a persistent challenge; recalls could impact reputation and finances.
ResMed Inc.
- Faces stringent healthcare regulations globally, but diversified product lines mitigate concentrated regulatory risk.
5. Supply Chain & Operations
Intuitive Surgical, Inc.
- High reliance on advanced component suppliers exposes it to supply chain disruptions.
ResMed Inc.
- Extensive global distribution and cloud-based services reduce supply chain bottlenecks risk.
6. ESG & Climate Transition
Intuitive Surgical, Inc.
- Limited disclosures on ESG initiatives; potential reputational risks as healthcare investors focus on sustainability.
ResMed Inc.
- Increasing focus on cloud solutions and sustainable healthcare tech positions company favorably on ESG metrics.
7. Geopolitical Exposure
Intuitive Surgical, Inc.
- Global sales subject to geopolitical tensions affecting healthcare procurement budgets.
ResMed Inc.
- Operations in 140 countries diversify geopolitical risk but expose company to complex international compliance.
Which company shows a better risk-adjusted profile?
Intuitive Surgical’s biggest risk is its high stock volatility combined with weak liquidity ratios, posing operational and market risks. ResMed’s primary risk lies in its elevated current ratio, hinting at suboptimal capital use despite solid profitability and leverage metrics. ResMed’s stronger profitability, lower volatility, and favorable debt profile yield a better risk-adjusted profile. The contrast in beta—1.67 for Intuitive Surgical versus 0.88 for ResMed—underscores ResMed’s relative market stability, justifying my cautious preference for ResMed in 2026.
Final Verdict: Which stock to choose?
Intuitive Surgical’s superpower lies in its unrivaled innovation in robotic surgery, driving premium pricing and strong gross margins. However, its stretched valuation and declining ROIC trend warrant vigilance. It suits investors chasing pioneering technology and aggressive growth potential, accepting elevated risk for disruption leadership.
ResMed’s moat is its dependable recurring revenue model anchored in sleep and respiratory care devices. Its steadily growing ROIC and healthier balance sheet offer greater financial resilience. This stock fits well in a GARP portfolio seeking consistent earnings growth coupled with a durable competitive advantage.
If you prioritize breakthrough innovation with high growth leverage, Intuitive Surgical is the compelling choice despite valuation and efficiency concerns. However, if you seek sustainable profitability with better stability, ResMed offers a superior risk-adjusted profile and value creation track record. Each appeals to distinct investor avatars balancing growth versus financial durability.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Intuitive Surgical, Inc. and ResMed Inc. to enhance your investment decisions:
