On Thursday, Needham reiterated its Hold rating on Masimo Corp. (NASDAQ:{{16565|MAMASI) shares, maintaining its stance on the stock without altering the price target. The decision comes after Masimo preannounced its fourth-quarter 2024 revenue, which exceeded consensus estimates.
The company reported a revenue of $601 million, marking approximately a 9% year-over-year growth, surpassing the consensus projection of $592 million.
According to InvestingPro data, Masimo’s stock has shown strong momentum with a 56.6% return over the past six months, though current analysis suggests the stock is trading above its Fair Value.
Masimo’s fourth-quarter revenue for its Healthcare segment is expected to be $368 million, which represents about an 8% increase year-over-year, slightly below the consensus estimate of $370 million. However, its Non-Healthcare revenue is anticipated to be $232 million, showing a strong 11% year-over-year growth, which is notably higher than the consensus of $221 million.
The company maintains a healthy financial position with a current ratio of 2.01 and operates with a moderate debt level, as indicated by its debt-to-equity ratio of 0.59.
For the full year of 2024, Masimo anticipates total revenue to reach $2.094 billion, which would be a modest 2% growth year-over-year. This includes an expected 9% increase in Healthcare revenue to $1.395 billion, while Non-Healthcare revenue is projected to decline by roughly 10% to $699 million. The company also provided guidance for its non-GAAP earnings per share (EPS) for the year, forecasting it to be more than $4.10, compared to the consensus of $4.12 and its prior guidance range of $3.95 to $4.10.
Looking ahead to 2025, Masimo has guided for Healthcare revenue between $1.50 billion and $1.53 billion, which would represent an 8-11% increase and is higher than the consensus estimate of $1.442 billion. InvestingPro subscribers have access to 13 additional key insights about Masimo, including detailed valuation metrics and growth indicators. The company’s comprehensive Pro Research Report, available to subscribers, provides in-depth analysis of these projections and their potential impact on shareholder value.
The company also expects non-GAAP operating profit to be between $398 million and $406 million, exceeding the consensus of $380 million. Furthermore, Masimo anticipates a non-GAAP operating margin of at least 26.5% and non-GAAP EPS guidance of $4.90 to $5.10, which is above the consensus estimate of $4.74.
Needham has indicated that it will wait to update its financial model for Masimo until the company reports its complete fourth-quarter financial results on February 25, 2025. With an overall Financial Health Score of "GOOD" from InvestingPro, and analyst targets ranging from $128.12 to $210, investors seeking deeper insights can access comprehensive analysis through the Pro Research Report.
In other recent news, Masimo Corporation has released its preliminary 2024 results, projecting consolidated revenue to be around $2,094 million, a 2% growth. The company also expects healthcare revenue for the year to be approximately $1,395 million, a 9% increase. However, non-healthcare revenue saw a decline of 10%, totaling around $699 million. Masimo also forecasts non-GAAP earnings per diluted share to exceed $4.10.
Additionally, the company has announced a strategic shift towards its core healthcare business, resulting in the termination of Tao Levy, Executive Vice President of Business Development. Michelle Brennan has been appointed as interim Chief Executive Officer for a six-month term.
Raymond (NS:RYMD) James maintained its Outperform rating on Masimo’s shares and increased the price target from $170.00 to $194.00, highlighting the company’s margin expansion opportunities. Piper Sandler analysts also expressed confidence in Masimo’s ability to surpass Q4 projections and 2025 consensus estimates.
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