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Masimo (MASI) Down 4.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Masimo (MASI - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Masimo due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Masimo Earnings and Revenues Beat Estimates in Q1

Masimo Corporation reported first-quarter 2021 adjusted earnings per share (EPS) of 90 cents, which surpassed the Zacks Consensus Estimate of 88 cents by 2.3%. However, the bottom line fell 7.2% from the year-ago quarter.

Revenues

For the first quarter, total revenues (including Royalty and other revenues) improved 10.9% year over year to $299 million and beat the Zacks Consensus Estimate by 0.3% as well.

Segmental Analysis

Product Revenues

Product revenues in the first quarter totaled $299 million, up 10.9% from the year-ago quarter and 9.5% in constant currency (cc).

Per management, shipments of non-invasive technology boards and instruments (excluding handheld and fingertip pulse oximeters) fell 8.3% to 66,000 in the quarter.

Margin Analysis

In the quarter under review, gross profit totaled $196.9 million, up 6.1% year over year. Gross margin was 65.8%, down 301 basis points (bps).

Total operating costs came in at $131.2 million, up 12%.

Operating profit in the quarter totaled $65.7 million, down 4.2% from the year-ago level. Operating margin contracted 345 bps to 21.9% in the quarter.

Cash Position

The company exited the first quarter of 2021 with cash and cash equivalents of $551.9 million compared with $641.4 at the end of the fourth quarter of 2020. Net cash provided by operating activities came in at $59.3 million compared with $42.4 million in the year-ago period.

2021 Guidance

Total revenues are projected at $1.21 billion, up from the previous view of $1.20 billion. The Zacks Consensus Estimate for the metric is pegged at $1.20 billion. Adjusted EPS is projected at $3.83, up from the previous outlook of $3.80. The Zacks Consensus Estimate for the same is pegged at $3.81.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Masimo has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 these revisions indicates a downward shift. Notably, Masimo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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