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Here's Why Investors Should Buy Masimo (MASI) Right Now

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Masimo Corporation (MASI - Free Report) has been on a healthy growth trajectory of late. It has rallied 10% in the last six months, ahead of the S&P 500’s 4.8% gain. The stock has a market cap of $4.45 billion.

Irvine, CA-based Masimo develops, manufactures and markets a family of non-invasive monitoring systems. The stock has a long-term expected earnings growth of 11.1%.

Solid Estimate Revision Trend

The estimate revision trend for the current year has been favorable for Masimo. In the past 60 days, four estimates moved north, with no movement in the opposite direction.

As a result, the Zacks Consensus Estimate for the current year moved up 5.3% to $2.80. Notably, this positive trend signifies bullish analyst sentiments. Masimo boasts a Zacks Rank #2 (Buy), indicating robust fundamentals and expectations of outperformance in the near term.

 

Let’s find out whether the recent positive trend is a sustainable one.

Growth Catalysts

Positive Tiding on Regulatory Front: Masimo announced 510(k) clearance and full-market release of its proprietary Rad-97 Pulse CO-Oximeter earlier this month. The launch of Rad-97 offers Masimo noninvasive and continuous monitoring through Measure-through Motion and Low Perfusion SET pulse oximetry and upgradeable rainbow technologies.

Considering the substantial demand for Advanced Monitoring Technologies in the global market, the launch reinstates investor confidence in the stock. A research report by Markets And Markets reveals that the global niche market is expected to reach a worth of $15.01 billion by 2022, at a CAGR of 8.5%.

Compelling Fundamental-Growth Story: Masimo’s long-term growth fundamentals are strong. The company recorded a five-year CAGR of 8.5% for revenues and 9.1% for adjusted earnings per share. The company has particularly witnessed an improvement in earnings over the last three years.

Positive Study Results: In August, an India-based study on Masimo’s SpHb platform demonstrated encouraging results. The study concluded that Masimo SpHb allows physicians to exclusively focus on haemoglobin trend during oncosurgery. Earlier this month, another Netherland-based study analyzing the performance of Masimo iSpO2 Rx in screening newborns for critical congenital heart disease also demonstrated positive results.

Other Stocks to Consider

A few other top-ranked stocks in the broader medical sector include Edwards Lifesciences Corp. (EW - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Cogentix Medical, Inc. (CGNT - Free Report) .

While Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), IDEXX Laboratories and Cogentix Medical hold a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences delivered an average earnings beat of 10.8% over the last four quarters. The company has a long-term expected earnings growth rate of 15.2%.

IDEXX Laboratories has an average earnings beat of 9.3% over the trailing four quarters. It has a long-term expected earnings growth rate of 19.8%.

Cogentix Medical came up with a positive earnings surprise of 200% in the last quarter. The stock represented a stellar return of 100.9% over the last year.

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