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Masimo (MASI) Scales a 52-Week High: What's Driving It?

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On Aug 21, shares of Masimo Corporation (MASI - Free Report) reached a 52-week high of $115.68, closing the session marginally lower at $115.24. Masimo’s impressive second-quarter 2018 results contributed to the stock’s rally.

Over the past year, shares of Masimo have rallied 33% against the industry’s decline of 6.8%. The current level is also higher than the S&P 500 index’s gain of 17.2%.

The California-based developer of non-invasive monitoring systems is expected to scale new highs in the near term. The company has an average positive earnings surprise of 14.7% for the trailing four quarters.

Which way are the Estimates Treading?

The estimate revision trend for the current year is impressive as well. Over the past 90 days, the Zacks Consensus Estimate for earnings per share inched up 1.4% to $2.90. The same for revenues is pegged at $846.9 million, reflecting growth of 6.1% from the year-ago.

The stock carries a Zacks Rank #2 (Buy).

Factors Driving Masimo

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Buoyed by a solid second-quarter show, Masimo raised its 2018 earnings and revenue guidance.

The company expects revenues of $850 million, up from the previous guidance of $846 million. Notably, this reflects growth of 10.8% at cc. The Zacks Consensus Estimate stands at $846.9 million, below the projected figure.

Product revenues are projected at $822 million, up from the previously projected $818 million. The company has retained the guidance for the Royalty and Other segment.

Adjusted earnings per share are expected at $2.90, up from the earlier estimated figure of $2.88. Notably, the Zacks Consensus Estimate for the same is pegged at $2.90.

Product Portfolio Solid

In the recently reported second quarter, Masimo announced the launch of UniView. Management is upbeat about the positive response by hospital executives about the potential benefits of using Root with UniView, Replica and Patient SafetyNet.

The company further announced Vital Signs Check App for Root, which aims at improving patient safety and clinician productivity.

Earlier, Masimo and Thermomedics, a PositiveID company, announced the debut and U.S. market release of TIR-1, a non-contact Bluetooth-enabled thermometer that integrates seamlessly with the Masimo Root patient monitoring and connectivity platform.

Moreover, Masimo continues to witness solid show by its flagship NomoLine Capnography, SedLine Brain Function Monitoring and O3 Regional Oximetry product lines.

Expanding Margins

In the recently reported quarter, gross profit totaled $567.7 million, up 8.6% year over year. Adjusted gross margin was 66.8%, up 70 basis points (bps).

Adjusted operating income in the quarter totaled $207.1 million, up 11.7% from a year ago. Adjusted operating margin was 24.4%, up 90 bps.

Want More from the MedTech Space?

Other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Inogen Inc. (INGN - Free Report) .

Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2.

Integer Holdings has an expected long-term earnings growth rate of 15%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inogen’s long-term earnings growth rate is projected at 24.5%. The stock carries a Zacks Rank #2.

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