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Why Is Masimo (MASI) Up 2.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Masimo (MASI - Free Report) . Shares have added about 2.5% 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 its most recent earnings report in order to get a better handle on the important drivers.
Masimo Q4 Earnings Beat on Demand for its Non-invasive Technology
Masimo reported fourth-quarter 2018 adjusted earnings of 83 cents per share, which surpassed the Zacks Consensus Estimate by 15.3%. Earnings improved from the year-ago quarter’s loss of 15 cents.
Revenues improved 7.3% year over year to $223.1 million and edged past the Zacks Consensus Estimate of $220 million.
Segmental Analysis
Product Revenues
Product revenues in the fourth quarter came in at $221.4 million, up 12.8% from the year-ago quarter and 13.5% at constant currency (cc). Per management, shipments of noninvasive technology boards and monitors increased 11.5% to 60,300.
Royalty and Other Revenues
Revenues at the segment totaled $1.7 million, significantly down from the year-ago quarter’s $11.6 million.
Margin Analysis
In the quarter under review, gross profit totaled $148.3 million, up 7% year over year. Gross margin was 66.5%, down 20 basis points (bps).
Adjusted operating income in the quarter totaled $54.2 million, up 20.1% from a year ago. Adjusted operating margin was 24.3%, up 260 bps.
Research and development expenses totaled $19.8 million, up 23.1% year over year.
SG&A expenses in the quarter were $74.7 million, down 4% from the year-ago quarter.
Guidance
For 2019, Masimo expects total revenues of $912 million, reflecting year-over-year growth of 10.7% and 9.9% at cc.
Notably, the company expects its Product segment to be the sole contributor to revenues in 2019. The segment’s 2019 operating margin is expected at 24%, calling for an improvement of 200 bps from 2018. Additionally, adjusted gross margin for the segment is expected at 66.8%.
Adjusted product earnings per diluted share of $3.08 is expected to increase 16.2% from 2018.
Adjusted EBITDA is projected at 30.4% for 2019.
Management however apprehends $7 million of year-over-year currency headwinds.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Masimo has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 this revision indicates a downward shift. Notably, Masimo has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Masimo (MASI) Up 2.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Masimo (MASI - Free Report) . Shares have added about 2.5% 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 its most recent earnings report in order to get a better handle on the important drivers.
Masimo Q4 Earnings Beat on Demand for its Non-invasive Technology
Masimo reported fourth-quarter 2018 adjusted earnings of 83 cents per share, which surpassed the Zacks Consensus Estimate by 15.3%. Earnings improved from the year-ago quarter’s loss of 15 cents.
Revenues improved 7.3% year over year to $223.1 million and edged past the Zacks Consensus Estimate of $220 million.
Segmental Analysis
Product Revenues
Product revenues in the fourth quarter came in at $221.4 million, up 12.8% from the year-ago quarter and 13.5% at constant currency (cc). Per management, shipments of noninvasive technology boards and monitors increased 11.5% to 60,300.
Royalty and Other Revenues
Revenues at the segment totaled $1.7 million, significantly down from the year-ago quarter’s $11.6 million.
Margin Analysis
In the quarter under review, gross profit totaled $148.3 million, up 7% year over year. Gross margin was 66.5%, down 20 basis points (bps).
Adjusted operating income in the quarter totaled $54.2 million, up 20.1% from a year ago. Adjusted operating margin was 24.3%, up 260 bps.
Research and development expenses totaled $19.8 million, up 23.1% year over year.
SG&A expenses in the quarter were $74.7 million, down 4% from the year-ago quarter.
Guidance
For 2019, Masimo expects total revenues of $912 million, reflecting year-over-year growth of 10.7% and 9.9% at cc.
Notably, the company expects its Product segment to be the sole contributor to revenues in 2019. The segment’s 2019 operating margin is expected at 24%, calling for an improvement of 200 bps from 2018. Additionally, adjusted gross margin for the segment is expected at 66.8%.
Adjusted product earnings per diluted share of $3.08 is expected to increase 16.2% from 2018.
Adjusted EBITDA is projected at 30.4% for 2019.
Management however apprehends $7 million of year-over-year currency headwinds.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Masimo has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 this revision indicates a downward shift. Notably, Masimo has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.