A month has gone by since the last earnings report for Masimo (MASI Quick QuoteMASI - Free Report) . Shares have added about 3.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Masimo due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Masimo’s Q4 Earnings Surpass Estimates, Margins Up

Masimo delivered adjusted earnings per share of $1.21 in the fourth quarter of 2021, up 23.5% year over year. The figure surpassed the Zacks Consensus Estimate by 10%.

The adjustments include acquisition, integration and related costs, among others.

GAAP earnings per share for the quarter was $1.18, down by 2.5% from the year-earlier figure.

Full-year adjusted earnings per share was $3.99, reflecting a 10.8% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 2.8%.

Revenues in Detail

Masimo registered revenues of $327.6 million in the fourth quarter, up 11% year over year on a reported basis. The figure also surpassed the Zacks Consensus Estimate by 2.6%.

At constant exchange rate (“CER”), revenues grew by 11.5%.

Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, were 76,000 in the fourth quarter of 2021. The company also recorded a 15% increase in single-patient-use sensor’s worldwide sales volume on the back of strong demand for its set sensors.

Full-year revenues were $1.24 billion, reflecting an 8.3% improvement from the year-ago period. The metric topped the Zacks Consensus Estimate by 0.8%.

At CER, revenues grew by 7.6%.

Margin Analysis

In the quarter under review, Masimo’s gross profit rose 14.9% to $214.9 million. Gross margin expanded 225 basis points (bps) to 65.6%.

Selling, general & administrative expenses climbed 15.2% to $104.1 million. Research and development expenses went up 5.3% year over year to $33.4 million. Adjusted operating expenses of $137.5 million increased 12.7% year over year.

Adjusted operating profit totaled $77.4 million, reflecting a 19.3% uptick from the prior-year quarter. Adjusted operating margin in the fourth quarter expanded by 164 bps to 23.6%.

Financial Position

Masimo exited full-year 2021 with cash and cash equivalents of $745.3 million compared with $641.4 million at the end of 2020.

Cumulative net cash flow from operating activities at the end of full-year 2021 was $264.8 million compared with $210.9 million a year ago.

Masimo repurchased $128.9 million worth of common stock at the end of 2021 compared with $110.5-million worth of common stock a year ago.

2022 Guidance

Masimo has initiated its full-year 2022 financial outlook.

Total revenues are now projected at $1,350 million, reflecting reported growth of 8.9%. The Zacks Consensus Estimate for the metric is currently pegged at $1.34 billion.

At CER, full-year 2022 revenue growth is expected to be 9.5%.

Adjusted earnings per share for 2022 is projected at $4.34. The Zacks Consensus Estimate for the same is pegged at $4.33.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, Masimo has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Masimo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.