Masimo Corporation MASI 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 six months, this Zacks Rank #3 (Hold) stock has gained 19.5 compared with the industry’s 2.4% growth. The S&P 500 declined 2.3% in the said time frame.

This renowned global provider of non-invasive monitoring systems has a market capitalization of $8.66 billion. The company projects 17.2% growth in 2023 revenues and expects to maintain its strong performance going forward. Masimo delivered an earnings surprise of 8.3% for the past four quarters, on average.

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Let’s delve deeper.

Positive Study Outcomes: We are optimistic about Masimo’s products, which have been the subject of various studies over the past few months. In January, the company announced favorable results of a prospective study in which researchers sought to assess the impact of varying ventilation strategies on the cerebral oxygenation of patients undergoing video-assisted thoracoscopic surgery (VATS).

Patient-Monitoring in Focus: On the third-quarter 2022 earnings call in November 2022, Masimo confirmed that its Healthcare business has been witnessing 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.

On the same call, Masimo confirmed that it had secured important new customers in its Healthcare business, including Denver Health and Nationwide Children’s (a renowned children’s hospital in the United States).

In January, Masimo signed an agreement to expand its partnership with Royal Philips for augmenting patient monitoring capabilities in home telehealth applications. The partnership will integrate Masimo W1 watch’s advanced health tracking capabilities with Philips’s enterprise patient monitoring ecosystem to improve telemonitoring and telehealth.

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 Masimo W1 health watch’s full market release in August 2022 was promising. Enhancement to its telehealth capabilities also raises optimism.


Overdependence on Masimo SET: Masimo currently derives the majority of its revenues from 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.

Masimo Corporation Price

Masimo Corporation Price

Masimo Corporation Price

Masimo Corporation price | Masimo Corporation Quote

Estimate Trend

Masimo has been witnessing a positive estimate revision trend for 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings per share (EPS) has moved 0.2% north to $4.37. The metric for fourth-quarter 2022 is stable at $1.17 per share for the past 30 days.

The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $601 million, indicating an 83.5% improvement from the year-ago period.

Key Picks

Some better-ranked stocks in the broader medical space include McKesson MCK, Cardinal Health, Inc. CAH and Merit Medical Systems, Inc. MMSI.

McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 10.4%. MCK’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, the average beat being 3.42%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McKesson has lost 0.4% against the industry’s 2.4% growth in the past six months.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 6.43%.

Cardinal Health has gained 16% compared with the industry’s 2.4% growth over the past six months.

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 25.35%.

Merit Medical has gained 19.5% compared with the industry’s 2.4% growth over the past six months.

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