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Why Is Masimo (MASI) Up 0.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Masimo (MASI - Free Report) . Shares have added about 0.2% in that time frame, underperforming 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 Surpass Estimates, Margins Down
Masimo delivered adjusted earnings per share of $1.32 in the fourth quarter of 2022, up 9.1% year over year. The figure surpassed the Zacks Consensus Estimate by 12.8%.
The adjustments include acquisition, integration and related costs, and acquired intangible asset amortization expenses, among others.
Our projection of adjusted earnings per share was $1.15.
GAAP earnings per share for the quarter was 76 cents, down by 35.6% from the year-earlier figure.
Full-year adjusted earnings per share was $4.59, up 15% from the end of the comparable 2021 period. The figure surpassed the Zacks Consensus Estimate by 3.4%.
Our projection of full-year adjusted earnings per share was $4.43.
Revenues in Detail
Masimo registered revenues of $617 million in the fourth quarter, up 88.3% year over year on a reported basis. The figure surpassed the Zacks Consensus Estimate by 2.7%.
At CER, fourth-quarter revenues improved 9%.
The fourth-quarter revenue compares to our estimate of $597 million.
The year-over-year uptick in revenues was primarily driven by strength in its healthcare business.
Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, were 78,800 in the fourth quarter of 2022.
Full-year revenues were $2.04 billion, reflecting a 64.3% surge from the comparable 2021 period. The figure surpassed the Zacks Consensus Estimate by 0.9%.
At CER, full-year revenues improved 11%.
Our projection of full-year revenues was $2.02 billion, which was in line with the Zacks Consensus Estimate.
Segmental Details
Masimo derives its revenues from two business sources — Healthcare and Non-healthcare.
Healthcare revenues in the fourth quarter were $351.9 million, representing growth of 7.4% on a reported basis and 10.1% at CER.
This compares to our projection of $347.7 million of Healthcare revenues in the fourth quarter.
Non-healthcare revenues in the fourth quarter were $265.1 million. This compares to our projection of $249.3 million of Non-healthcare revenues in the fourth quarter.
Margin Analysis
In the quarter under review, Masimo’s gross profit rose 45.8% to $313.3 million. Gross margin contracted a huge 1482 basis points (bps) to 50.8%.
We had projected 50.7% of gross margin for the fourth quarter.
Selling, general & administrative expenses jumped 78.2% to $185.5 million. Research and development expenses went up 62.6% year over year to $54.3 million. Total adjusted operating expenses of $239.8 million increased 74.4% year over year.
Total adjusted operating profit amounted to $73.5 million, reflecting a 5% decline from the prior-year quarter. The adjusted operating margin in the fourth quarter contracted a huge 1171 bps to 11.9%.
Financial Position
Masimo exited the full-year 2022 with cash and cash equivalents of $202.9 million compared with $745.3 million at the end of 2021. Long-term debt at the end of the full-year 2022 was $941.6 million.
Cumulative net cash flow from operating activities at the end of 2022 was $29.5 million compared with $264.8 million a year ago.
Guidance
Masimo has initiated its full-year 2023 financial outlook and provided projections for the first quarter.
For the full year, total revenues are projected to be in the range of $2,415 million to $2,460 million. The Zacks Consensus Estimate for the metric is currently pegged at $2.37 billion.
Healthcare revenues are expected to lie within $1,450 million to $1,465 million, while Non-healthcare revenues for the year are likely to be within $965 million to $995 million.
Adjusted earnings per share for 2023 is projected to be within $4.70-$4.80. The Zacks Consensus Estimate for the same is pegged at $4.37.
For the first quarter of 2023, Masimo expects its total revenues in the range of $550 million to $565 million. The Zacks Consensus Estimate for the metric is currently pegged at $553.8 million.
Healthcare revenues are expected to lie within $340 million to $345 million, whereas non-healthcare revenues are likely to be within $210 million to $220 million for the quarter.
Adjusted earnings per share for the fourth quarter is projected to be within 81-86 cents. The Zacks Consensus Estimate for the same is pegged at 92 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.85% due to these changes.
VGM Scores
Currently, Masimo has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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 these revisions indicates a downward shift. Notably, Masimo has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Masimo belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Tandem Diabetes Care, Inc. (TNDM - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Tandem Diabetes Care, Inc. reported revenues of $220.5 million in the last reported quarter, representing a year-over-year change of +5%. EPS of -$0.01 for the same period compares with $0.16 a year ago.
For the current quarter, Tandem Diabetes Care, Inc. is expected to post a loss of $0.53 per share, indicating a change of -130.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Tandem Diabetes Care, Inc. Also, the stock has a VGM Score of D.
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Why Is Masimo (MASI) Up 0.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Masimo (MASI - Free Report) . Shares have added about 0.2% in that time frame, underperforming 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 Surpass Estimates, Margins Down
Masimo delivered adjusted earnings per share of $1.32 in the fourth quarter of 2022, up 9.1% year over year. The figure surpassed the Zacks Consensus Estimate by 12.8%.
The adjustments include acquisition, integration and related costs, and acquired intangible asset amortization expenses, among others.
Our projection of adjusted earnings per share was $1.15.
GAAP earnings per share for the quarter was 76 cents, down by 35.6% from the year-earlier figure.
Full-year adjusted earnings per share was $4.59, up 15% from the end of the comparable 2021 period. The figure surpassed the Zacks Consensus Estimate by 3.4%.
Our projection of full-year adjusted earnings per share was $4.43.
Revenues in Detail
Masimo registered revenues of $617 million in the fourth quarter, up 88.3% year over year on a reported basis. The figure surpassed the Zacks Consensus Estimate by 2.7%.
At CER, fourth-quarter revenues improved 9%.
The fourth-quarter revenue compares to our estimate of $597 million.
The year-over-year uptick in revenues was primarily driven by strength in its healthcare business.
Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, were 78,800 in the fourth quarter of 2022.
Full-year revenues were $2.04 billion, reflecting a 64.3% surge from the comparable 2021 period. The figure surpassed the Zacks Consensus Estimate by 0.9%.
At CER, full-year revenues improved 11%.
Our projection of full-year revenues was $2.02 billion, which was in line with the Zacks Consensus Estimate.
Segmental Details
Masimo derives its revenues from two business sources — Healthcare and Non-healthcare.
Healthcare revenues in the fourth quarter were $351.9 million, representing growth of 7.4% on a reported basis and 10.1% at CER.
This compares to our projection of $347.7 million of Healthcare revenues in the fourth quarter.
Non-healthcare revenues in the fourth quarter were $265.1 million. This compares to our projection of $249.3 million of Non-healthcare revenues in the fourth quarter.
Margin Analysis
In the quarter under review, Masimo’s gross profit rose 45.8% to $313.3 million. Gross margin contracted a huge 1482 basis points (bps) to 50.8%.
We had projected 50.7% of gross margin for the fourth quarter.
Selling, general & administrative expenses jumped 78.2% to $185.5 million. Research and development expenses went up 62.6% year over year to $54.3 million. Total adjusted operating expenses of $239.8 million increased 74.4% year over year.
Total adjusted operating profit amounted to $73.5 million, reflecting a 5% decline from the prior-year quarter. The adjusted operating margin in the fourth quarter contracted a huge 1171 bps to 11.9%.
Financial Position
Masimo exited the full-year 2022 with cash and cash equivalents of $202.9 million compared with $745.3 million at the end of 2021. Long-term debt at the end of the full-year 2022 was $941.6 million.
Cumulative net cash flow from operating activities at the end of 2022 was $29.5 million compared with $264.8 million a year ago.
Guidance
Masimo has initiated its full-year 2023 financial outlook and provided projections for the first quarter.
For the full year, total revenues are projected to be in the range of $2,415 million to $2,460 million. The Zacks Consensus Estimate for the metric is currently pegged at $2.37 billion.
Healthcare revenues are expected to lie within $1,450 million to $1,465 million, while Non-healthcare revenues for the year are likely to be within $965 million to $995 million.
Adjusted earnings per share for 2023 is projected to be within $4.70-$4.80. The Zacks Consensus Estimate for the same is pegged at $4.37.
For the first quarter of 2023, Masimo expects its total revenues in the range of $550 million to $565 million. The Zacks Consensus Estimate for the metric is currently pegged at $553.8 million.
Healthcare revenues are expected to lie within $340 million to $345 million, whereas non-healthcare revenues are likely to be within $210 million to $220 million for the quarter.
Adjusted earnings per share for the fourth quarter is projected to be within 81-86 cents. The Zacks Consensus Estimate for the same is pegged at 92 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.85% due to these changes.
VGM Scores
Currently, Masimo has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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 these revisions indicates a downward shift. Notably, Masimo has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Masimo belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Tandem Diabetes Care, Inc. (TNDM - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Tandem Diabetes Care, Inc. reported revenues of $220.5 million in the last reported quarter, representing a year-over-year change of +5%. EPS of -$0.01 for the same period compares with $0.16 a year ago.
For the current quarter, Tandem Diabetes Care, Inc. is expected to post a loss of $0.53 per share, indicating a change of -130.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Tandem Diabetes Care, Inc. Also, the stock has a VGM Score of D.