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Masimo (MASI) Up 20.6% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Masimo Corporation (MASI - Free Report) . Shares have added about 20.6% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 Beats on Q3 Earnings, Revenues; Guides Up
Masimo reported earnings of $0.47 per share in the third quarter of 2016, which increased from $0.36 in the year-ago quarter. The figure also came above the Zacks Consensus Estimate of $0.42.
Revenues improved almost 9.9% year over year to $167.6 million, well ahead of the Zacks Consensus Estimate of $166 million. We note that product revenues increased 10.8% to $160.3 million in the quarter.
Quarter Details
Worldwide direct product revenues (85.7% of product revenues) increased 14.3% to $137.4 million. OEM sales (14.3% of product revenues) fell 6.1% to $22.9 million from the year-earlier quarter. Revenue from sales of Masimo rainbow products rose 5.0% year over year to $18.0 million.
During the reported quarter, the company shipped approximately 45,800 SET Pulse Oximeters and rainbow SET Pulse CO-Oximeters, excluding handheld units. Per company estimation, its worldwide installed base as of Oct 1, 2016 was 1,482,000 units, up 6.6% from 1,390,000 units as of Oct 3, 2015.
Financial Condition
As of Oct 1, 2016, total cash and cash investments were $126.0 million compared with $132.3 million as of Jan 2, 2016. During the nine-month period ending Oct 1, 2016, the company generated $87.8 million in cash from operations and received $26.1 million in proceeds from stock option exercises. During the same nine-month period, the company repurchased 1.5 million shares at a total cost of $63.4 million and made $77.5 million in repayments on the company’s line-of-credit.
Guidance
For 2016, Masimo raised the total revenue guidance to approximately $692 million from $689 million expected previously.
Product revenues are expected at around $661 million, up from the previous guidance of $658 million. Meanwhile, Royalty revenue projection was raised to $31 million from the previous $30 million.
Masimo now projects earnings of $2.13 per share, up from the earlier projected figure of $2.01.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three upward revisions or the current quarter. In the past month, the consensus estimate has shifted upward by 12% due to these changes.
At this time, Masimo's stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors. However, it is also suitable for those looking for value and to a lesser degree momentum.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Masimo (MASI) Up 20.6% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Masimo Corporation (MASI - Free Report) . Shares have added about 20.6% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 Beats on Q3 Earnings, Revenues; Guides Up
Masimo reported earnings of $0.47 per share in the third quarter of 2016, which increased from $0.36 in the year-ago quarter. The figure also came above the Zacks Consensus Estimate of $0.42.
Revenues improved almost 9.9% year over year to $167.6 million, well ahead of the Zacks Consensus Estimate of $166 million. We note that product revenues increased 10.8% to $160.3 million in the quarter.
Quarter Details
Worldwide direct product revenues (85.7% of product revenues) increased 14.3% to $137.4 million. OEM sales (14.3% of product revenues) fell 6.1% to $22.9 million from the year-earlier quarter. Revenue from sales of Masimo rainbow products rose 5.0% year over year to $18.0 million.
During the reported quarter, the company shipped approximately 45,800 SET Pulse Oximeters and rainbow SET Pulse CO-Oximeters, excluding handheld units. Per company estimation, its worldwide installed base as of Oct 1, 2016 was 1,482,000 units, up 6.6% from 1,390,000 units as of Oct 3, 2015.
Financial Condition
As of Oct 1, 2016, total cash and cash investments were $126.0 million compared with $132.3 million as of Jan 2, 2016. During the nine-month period ending Oct 1, 2016, the company generated $87.8 million in cash from operations and received $26.1 million in proceeds from stock option exercises. During the same nine-month period, the company repurchased 1.5 million shares at a total cost of $63.4 million and made $77.5 million in repayments on the company’s line-of-credit.
Guidance
For 2016, Masimo raised the total revenue guidance to approximately $692 million from $689 million expected previously.
Product revenues are expected at around $661 million, up from the previous guidance of $658 million. Meanwhile, Royalty revenue projection was raised to $31 million from the previous $30 million.
Masimo now projects earnings of $2.13 per share, up from the earlier projected figure of $2.01.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been three upward revisions or the current quarter. In the past month, the consensus estimate has shifted upward by 12% due to these changes.
Masimo Corporation Price and Consensus
Masimo Corporation Price and Consensus | Masimo Corporation Quote
VGM Scores
At this time, Masimo's stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors. However, it is also suitable for those looking for value and to a lesser degree momentum.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.