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Masimo's (MASI) Preliminary Q2 Revenues Dampened by Lower Sales
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Masimo Corporation (MASI - Free Report) announced preliminary financial results for second-quarter 2023 on Jul 17. Following this release, shares of the company fell 1.6% till the last trading.
The company is scheduled to release second-quarter results on Aug 8 after the closing bell.
Prelim Q2 in Detail
Per the preliminary release, second-quarter 2023 consolidated revenues are likely to range from $453 million to $457 million. The Zacks Consensus Estimate of $550.9 million lies above the preliminary figure.
Healthcare revenues are expected to range from $280 million to $282 million, while non-healthcare revenues are expected to lie within $173 million-$175 million.
Per management, although the healthcare business made significant market share gains via new contracting in the second quarter, the revenues were lower than expected due to various factors. These factors include large orders that were anticipated for the second quarter being delayed to the second half of the year and continued increased hospital labor costs straining hospital budgets and lowering demand for capital equipment.
2023 Guidance
Management has provided its current expectations regarding its revenues for the full year.
Management currently expects to reduce the lower end of the full-year revenue guidance for the healthcare business to $1.30 billion from $1.45 billion. Management also confirmed that they are presently assessing the upper end of revenue guidance for the healthcare business, but it could be materially higher than the lower end of the range as Masimo is targeting its original guidance.
The guidance provided for its healthcare business revenues at its first-quarter 2023 earnings release was within $1,450 million-$1,465 million (up 8-9% and 8-10% on a reported basis and at CER, respectively).
Masimo also expects to reduce annual revenue guidance for the non-healthcare business to $800 million to $850 million from $965 million to $995 million.
Our Take
Masimo’s soft preliminary second-quarter 2023 performance projections raise our apprehensions. However, management’s confirmation that despite second-quarter revenues being below expectations, the company is adopting measures to reduce costs in the second half of the year looks encouraging.
Per management, despite the second-quarter revenue shortfall, the fundamentals of both healthcare and non-healthcare businesses remain strong. On the healthcare side, new hospital customers are continuing to switch to Masimo technology, thus increasing the company’s share in the hospital market. Also, Masimo drove record contracting in the first half of the year, both in the United States and worldwide. These raise our optimism about the stock.
In June, Masimo announced that it is expanding its premium Denon brand to introduce its latest offering, Masimo AAT (Adaptive Acoustic Technology). The products offered are Denon PerL and PerL Pro True Wireless Earbuds featuring Masimo AAT. The same month, Masimo received the FDA’s 510(k) clearance for its patient-worn, continuous multi-parameter vital signs monitor, Radius VSM.
In May, Masimo announced the global expansion of the HEOS platform, an iconic brand within its non-healthcare premium and luxury consumer audio business. These developments also look promising for the stock.
Price Performance
Shares of the company have lost 10.9% between Apr 2, 2023 and Jul 1, 2023 against the industry’s 6.6% rise and the S&P 500’s 8.7% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Currently, Masimo carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, HealthEquity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
BD has gained 6.7% compared with the industry’s 11.3% rise between Apr 2, 2023 and Jul 1, 2023.
HealthEquity, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 7.6% against the industry’s 2.1% decline between Apr 2, 2023 and Jul 1, 2023.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 8.1% compared with the industry’s 4.5% rise between Apr 2, 2023 and Jul 1, 2023.
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Masimo's (MASI) Preliminary Q2 Revenues Dampened by Lower Sales
Masimo Corporation (MASI - Free Report) announced preliminary financial results for second-quarter 2023 on Jul 17. Following this release, shares of the company fell 1.6% till the last trading.
The company is scheduled to release second-quarter results on Aug 8 after the closing bell.
Prelim Q2 in Detail
Per the preliminary release, second-quarter 2023 consolidated revenues are likely to range from $453 million to $457 million. The Zacks Consensus Estimate of $550.9 million lies above the preliminary figure.
Healthcare revenues are expected to range from $280 million to $282 million, while non-healthcare revenues are expected to lie within $173 million-$175 million.
Per management, although the healthcare business made significant market share gains via new contracting in the second quarter, the revenues were lower than expected due to various factors. These factors include large orders that were anticipated for the second quarter being delayed to the second half of the year and continued increased hospital labor costs straining hospital budgets and lowering demand for capital equipment.
2023 Guidance
Management has provided its current expectations regarding its revenues for the full year.
Management currently expects to reduce the lower end of the full-year revenue guidance for the healthcare business to $1.30 billion from $1.45 billion. Management also confirmed that they are presently assessing the upper end of revenue guidance for the healthcare business, but it could be materially higher than the lower end of the range as Masimo is targeting its original guidance.
The guidance provided for its healthcare business revenues at its first-quarter 2023 earnings release was within $1,450 million-$1,465 million (up 8-9% and 8-10% on a reported basis and at CER, respectively).
Masimo also expects to reduce annual revenue guidance for the non-healthcare business to $800 million to $850 million from $965 million to $995 million.
Our Take
Masimo’s soft preliminary second-quarter 2023 performance projections raise our apprehensions. However, management’s confirmation that despite second-quarter revenues being below expectations, the company is adopting measures to reduce costs in the second half of the year looks encouraging.
Per management, despite the second-quarter revenue shortfall, the fundamentals of both healthcare and non-healthcare businesses remain strong. On the healthcare side, new hospital customers are continuing to switch to Masimo technology, thus increasing the company’s share in the hospital market. Also, Masimo drove record contracting in the first half of the year, both in the United States and worldwide. These raise our optimism about the stock.
In June, Masimo announced that it is expanding its premium Denon brand to introduce its latest offering, Masimo AAT (Adaptive Acoustic Technology). The products offered are Denon PerL and PerL Pro True Wireless Earbuds featuring Masimo AAT. The same month, Masimo received the FDA’s 510(k) clearance for its patient-worn, continuous multi-parameter vital signs monitor, Radius VSM.
In May, Masimo announced the global expansion of the HEOS platform, an iconic brand within its non-healthcare premium and luxury consumer audio business. These developments also look promising for the stock.
Price Performance
Shares of the company have lost 10.9% between Apr 2, 2023 and Jul 1, 2023 against the industry’s 6.6% rise and the S&P 500’s 8.7% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Currently, Masimo carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, HealthEquity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
BD, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. BDX’s earnings surpassed estimates in all the trailing four quarters, with an average of 5.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has gained 6.7% compared with the industry’s 11.3% rise between Apr 2, 2023 and Jul 1, 2023.
HealthEquity, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 7.6% against the industry’s 2.1% decline between Apr 2, 2023 and Jul 1, 2023.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 8.1% compared with the industry’s 4.5% rise between Apr 2, 2023 and Jul 1, 2023.