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Here's Why You Should Retain Masimo (MASI) Stock for Now
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Masimo Corporation (MASI - Free Report) is well-poised for growth in the coming quarters, courtesy of its slew of favorable study outcomes over the past few months. The optimism led by a solid third-quarter 2022 performance, along with its focus on patient monitoring, is expected to contribute further. However, concerns regarding overdependence on Masimo SET and stiff competition persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 29.9% compared with the industry’s and the S&P 500's 14.1% decline.
The renowned global provider of non-invasive monitoring systems has a market capitalization of $8.24 billion. The company projects 11.5% growth for 2022 and expects to maintain its strong performance. Masimo has delivered an earnings surprise of 8.3% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Positive Study Outcomes: We are optimistic about Masimo’s products, which have been the subjects of various studies over the past few months. In January, the company announced favorable results of a prospective study in which researchers assessed the performance of non-invasive spot-check hemoglobin measurement with Masimo SpHb on emergency department patients.
The same month, Masimo announced the findings of a before-and-after study published in PLoS ONE in which researchers evaluated the impact of implementing remote patient monitoring with Masimo Patient SafetyNet on the efficacy of hospital rapid response teams.
Patient-Monitoring in Focus: During the third-quarter 2022 earnings call in November 2022, Masimo confirmed that its Healthcare business has been seeing solid growth as it realizes a steady stream of new customer wins globally. In its consumer business, sales growth had also exceeded management’s expectations as demand for premium audio products was strong.
During the same call, Masimo confirmed that in its Healthcare business, the company had secured important new customers, including Denver Health and Nationwide Children’s (a renowned children’s hospital in the United States).
Strong Q3 Results: Masimo’s solid third-quarter 2022 results buoy our optimism. The company recorded a solid uptick in the top line and its healthcare business. Robust order shipments and expansion of the company’s installed base were also seen. The full-market release of the Masimo W1 health watch for consumer use in August 2022 was promising. Enhancement to its telehealth capabilities is encouraging.
Downsides
Overdependence on Masimo SET: Masimo currently derives the majority of its revenues from its primary product offerings like the Masimo SET platform, Masimo rainbow SET platform and related products. Thus, the company’s business is highly dependent on the continued success and market acceptance of its primary product offerings.
Stiff Competition: Masimo operates in an intensely competitive medical device industry and is significantly affected by new product introductions and other market activities of industry participants. The Masimo SET platform faces additional competition from companies developing products for use with third-party monitoring systems and from companies currently marketing their pulse oximetry monitors.
Estimate Trend
Masimo has been witnessing a negative estimate revision trend for 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 0.4% south to $4.45.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $600.9 million, suggesting an 83.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has lost 3.2% against the industry’s 22.1% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.7%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3%.
Cardinal Health has gained 46.2% against the industry’s 2.4% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 26.3% against the industry’s 2.4% decline over the past year.
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Here's Why You Should Retain Masimo (MASI) Stock for Now
Masimo Corporation (MASI - Free Report) is well-poised for growth in the coming quarters, courtesy of its slew of favorable study outcomes over the past few months. The optimism led by a solid third-quarter 2022 performance, along with its focus on patient monitoring, is expected to contribute further. However, concerns regarding overdependence on Masimo SET and stiff competition persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 29.9% compared with the industry’s and the S&P 500's 14.1% decline.
The renowned global provider of non-invasive monitoring systems has a market capitalization of $8.24 billion. The company projects 11.5% growth for 2022 and expects to maintain its strong performance. Masimo has delivered an earnings surprise of 8.3% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Positive Study Outcomes: We are optimistic about Masimo’s products, which have been the subjects of various studies over the past few months. In January, the company announced favorable results of a prospective study in which researchers assessed the performance of non-invasive spot-check hemoglobin measurement with Masimo SpHb on emergency department patients.
The same month, Masimo announced the findings of a before-and-after study published in PLoS ONE in which researchers evaluated the impact of implementing remote patient monitoring with Masimo Patient SafetyNet on the efficacy of hospital rapid response teams.
Patient-Monitoring in Focus: During the third-quarter 2022 earnings call in November 2022, Masimo confirmed that its Healthcare business has been seeing solid growth as it realizes a steady stream of new customer wins globally. In its consumer business, sales growth had also exceeded management’s expectations as demand for premium audio products was strong.
During the same call, Masimo confirmed that in its Healthcare business, the company had secured important new customers, including Denver Health and Nationwide Children’s (a renowned children’s hospital in the United States).
Strong Q3 Results: Masimo’s solid third-quarter 2022 results buoy our optimism. The company recorded a solid uptick in the top line and its healthcare business. Robust order shipments and expansion of the company’s installed base were also seen. The full-market release of the Masimo W1 health watch for consumer use in August 2022 was promising. Enhancement to its telehealth capabilities is encouraging.
Downsides
Overdependence on Masimo SET: Masimo currently derives the majority of its revenues from its primary product offerings like the Masimo SET platform, Masimo rainbow SET platform and related products. Thus, the company’s business is highly dependent on the continued success and market acceptance of its primary product offerings.
Stiff Competition: Masimo operates in an intensely competitive medical device industry and is significantly affected by new product introductions and other market activities of industry participants. The Masimo SET platform faces additional competition from companies developing products for use with third-party monitoring systems and from companies currently marketing their pulse oximetry monitors.
Estimate Trend
Masimo has been witnessing a negative estimate revision trend for 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 0.4% south to $4.45.
The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $600.9 million, suggesting an 83.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has lost 3.2% against the industry’s 22.1% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.7%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3%.
Cardinal Health has gained 46.2% against the industry’s 2.4% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 26.3% against the industry’s 2.4% decline over the past year.