Masimo Corporation ( MASI Quick Quote MASI - Free Report) has been gaining on the back of its slew of favorable study outcomes over the past few months. A robust first-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 year, this Zacks Rank #2 (Buy) stock has lost 43.4% compared with the
industry’s 25.9% fall and the S&P 500's 9.5% decline.
The renowned global provider of non-invasive monitoring systems has a market capitalization of $7.76 billion. The company projects 15.5% growth for 2022 and expects to maintain its strong performance. Masimo has delivered an earnings surprise of 4.4% 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 subjects of various studies over the past few months. In May, the company announced the findings of a retrospective study in which researchers investigated the potential ability of Masimo PVi (pleth variability index) to guide emergency room triage decisions for pediatric patients with signs of obstructive respiratory diseases like asthma attacks.
In April, Masimo announced the findings of a retrospective study in which researchers investigated the impact of anesthesia during cardiac surgery guided by Masimo SedLine Brain Function Monitoring, particularly by SedLine’s processed electroencephalography feature — the Patient State Index.
Patient-Monitoring in Focus: During the first-quarter 2022 earnings call in May, Masimo confirmed that it had been witnessing a rebound in elective surgeries and registering better access for its sales force within hospitals. The company’s installed base has been growing due to strong and consistent customer demand for its technologies.
In April, Masimo completed the previously announced acquisition of Sound United, which will add to its broad portfolio of hospital and home medical technology solutions. Masimo also confirmed that it plans to launch some high-potential products in consumer health and wellness.
Strong Q1 Results: Masimo’s solid first-quarter 2022 results buoy our optimism. The company recorded a solid uptick in its top line. It also registered robust order shipments in the reported quarter. The expansion of the company’s installed base is also impressive. Rebound in elective surgeries and better access for its sales force within hospitals is encouraging. Gross margin expansion bodes well. The company’s raised full-year financial outlook looks promising. Downsides Overdependence on Masimo SET: Masimo currently derives the majority of its revenues from its 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, as well as from companies that are currently marketing their own pulse oximetry monitors. Estimate Trend
Masimo has been witnessing a positive estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 6.2% north to $4.61.
The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $541.9 million, suggesting a 77.6% improvement from the year-ago quarter’s reported number.
Other Key Picks
A few other stocks from the broader medical space that investors can consider are
AMN Healthcare Services, Inc. ( AMN Quick Quote AMN - Free Report) , Omnicell, Inc. ( OMCL Quick Quote OMCL - Free Report) and ShockWave Medical, Inc. ( SWAV Quick Quote SWAV - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.
You can see
the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has gained 18.7% against the
industry’s 50.7% fall in the past year.
Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 20%. OMCL’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 13.4%.
Omnicell has lost 17.9% compared with the
industry’s 56.3% fall over the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 53.3% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 189.9%.
ShockWave Medical has gained 3% against the industry’s 25.9% fall over the past year.