The great growth stock pullback of 2022 hasn't been much fun, but it does offer investors areas of tremendous value. Many companies are trading at valuations not seen since the March 2020 crash, even though their fundamentals have actually improved. Savvy investors with long-term horizons are pouncing on these opportunities.

This is the case with Intuitive Surgical (ISRG -0.47%) stock. These three charts tell the story.

Our growing aging population ensures growth

Going in for heart surgery is a scary proposition. Traditionally, the surgeon would need to open up the chest cavity to perform it, hence the term "open-heart surgery." But with robotic-assisted surgical technology, many common heart procedures can be done with only small incisions. This is just one example of many procedures performed with minimally invasive techniques.

Intuitive Surgical is the developer, manufacturer, and marketer of the da Vinci surgical system. This robotic-assisted surgical platform is the global market leader. There are more than 6,900 systems installed globally, with the majority here in the U.S. Intuitive's revenue grows when the number of procedures increases. COVID-19 stunted this growth a bit as swamped hospitals put off many non-emergency procedures. However, secular trends are positive. As shown below, our population is aging, which will increase surgical demand.

U.S. share of population 56 and older

Source: Statista

The U.S. Census Bureau estimates that the number of Americans 65 and older will increase from 56 million in 2020 to more than 73 million in 2030. With robotic-assisted surgery becoming more popular, these demand trends bode well for Intuitive Surgical and its shareholders.

Leading profitability leads to a fortress balance sheet

Investors often focus on the income statement. After all, this is where the revenue and profits are shown. But the balance sheet is often the best way to measure a company's overall health. It identifies a company's cash, investments, and debts, among other information. Intuitive Surgical's industry-leading profitability, shown below, has enabled it to have a very enviable balance sheet.

ISRG Operating Margin (TTM) Chart

ISRG Operating Margin (TTM) data by YCharts

Intuitive Surgical has no long-term debt and has accumulated a boatload of cash and investments because of this profitability. There are $8.4 billion in cash and investments on hand at the end of the last quarter, the equivalent of over 11% of the current market cap. This means excellent value for stockholders.

Recurring revenue indicates future success

Intuitive's revenue comes from three sources: selling machines, instruments and accessories, and machine servicing. Selling machines is a one-time revenue source, but the other two are recurring revenues.

In fact, Intuitive gets around 70% of sales from recurring sources, as shown below. 

Intuitive Surgical recurring revenue

Data source: Intuitive Surgical. Chart by author.

Without this, Intuitive's future wouldn't be as bright because a saturated market will mean slowing sales of machines. Instead, this shows that sales will increase with more devices placed.  

2022 hasn't been kind to Intuitive's stock, which is down more than 40% year to date. The positive news is that the price-to-earnings (P/E) ratio is now lower than just before the pandemic. The long-term trends are positive, the balance sheet is phenomenal, and recurring revenue is crucial to future success -- and smart investors know it.