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If You Invested $1000 in Masimo a Decade Ago, This is How Much It'd Be Worth Now

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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Masimo (MASI - Free Report) ten years ago? It may not have been easy to hold on to MASI for all that time, but if you did, how much would your investment be worth today?

Masimo's Business In-Depth

With that in mind, let's take a look at Masimo's main business drivers.

Irvine, CA-based Masimo Corporation develops, manufactures and markets a family of non-invasive monitoring systems. The company has two segments: Healthcare revenues and Non-healthcare revenues.

Masimo derives the majority of its Healthcare segment revenue from four primary sources: (i) direct sales under deferred equipment agreements with end-user hospitals where the company provides up-front monitoring equipment at no up-front charge in exchange for a multi-year sensor purchase commitment (ii) other direct sales of non-invasive monitoring solutions to end-user hospitals, emergency medical response organizations and other direct customers (iii) sales of non-invasive monitoring solutions to distributors (iv) sales of integrated circuit boards to original equipment manufacturer (OEM) customers who incorporate the company’s embedded software technology into their multiparameter monitoring devices.

Notable products include Masimo’s flagship Signal Extraction Technology (SET) Pulse Oximetry, which monitors blood oxygen saturation levels and protect against hypoxemia and hyperoxemia. The device also measures pulse rate. The company has also ventured into non-invasive blood constituent, brain and breathe monitoring. Its rainbow Pulse CO-Oximetry measures blood constituents that include total hemoglobin (SpHb), oxygen content (SpOC), carboxyhemoglobin (SpCO), methemoglobin (SpMet) and SET measurements of oxygen saturation (SpO2), pulse rate (PR), perfusion index (PI) and pleth variability index (PVi).

Rainbow Acoustic Monitoring measures respiration rate (RRa) non-invasively and on a continuous basis. SedLine monitors the brain functioning of patients under anesthesia or sedation. The company also provides Capnography and Multigas Monitoring original equipment manufacturers (OEM) solutions.

Non-healthcare revenue is related to hardware and embedded software integrated into final products that are manufactured and sold by the company.

On Apr 11, 2022, Masimo acquired Viper Holdings Corporation, the parent company of DEI Sales, Inc., which owns Sound United, a consumer technology company that owns a portfolio of premium brands, including Bowers & Wilkins, Denon, Polk Audio and Marantz.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Masimo a decade ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in February 2014 would be worth $4,597.61, or a 359.76% gain, as of February 5, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 178.17% and gold's return of 55.50% over the same time frame.

Looking ahead, analysts are expecting more upside for MASI.

Masimo's overdependence on its SET platform and persistent reimbursement headwinds are major concerns for the company. Masimo operates in a stiff competitive space and a volatile forex market, which raises apprehension. Macroeconomic concerns also continue to bother Masimo. The Zacks Model expects the adjusted earnings per share to decline between 2022 and 2025 and exhibit a CAGR of 7.2%. Yet, Masimo’s products have been the subject of various studies over the past few months, which is promising. Its focus on patient monitoring and its ongoing research and development (R&D) efforts are also impressive. A solid product suite is likely to aid Masimo in solidifying its business globally. A strong liquidity position is an added plus. Our model anticipates the total revenues to improve between 2022 and 2025 and exhibit a CAGR of 3.2%.

Shares have gained 20.48% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.

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