Gold prices steady ahead of Fed decision; weekly weakness noted
On Wednesday, BTIG analyst Sean Lavin adjusted the price target for Masimo Corp . (NASDAQ:MASI) to $193 from the previous target of $206, while maintaining a Buy rating on the stock. According to InvestingPro data, analysts maintain a bullish consensus with price targets ranging from $170 to $215, suggesting potential upside. The stock currently trades at $161.47, with a notable 18.7% gain over the past year despite recent market volatility. Lavin noted that Masimo had exceeded expectations with a roughly $3 million sales increase and a 15-cent adjusted earnings per share (EPS) beat. Despite trimming its profitability forecast due to the impact of tariffs, Masimo announced the sale of its Sound United consumer audio segment to Harman International for approximately $350 million, a move Lavin views as positive based on recent investor feedback.
Masimo’s first-quarter revenue reached $371 million, marking a 10.5% year-over-year increase on a constant currency basis and surpassing the consensus estimate of $367.9 million. The company’s overall financial health score is rated as "GOOD" by InvestingPro, with particularly strong momentum and cash flow metrics. While operating with a moderate debt level, the company maintains a healthy current ratio of 1.98, indicating strong liquidity management. The company also reported driver shipments of 72,200 units, significantly higher than the consensus estimate of approximately 57,000 units. A large tender order renewal contributed to this performance by boosting capital sales and reducing consumables revenue. Additionally, Masimo remains on track to meet or exceed its full-year driver shipment guidance of 240,000 to 260,000 units.
The company’s adjusted gross margin (GM) for the first quarter was 63.1%, aligning with consensus estimates, but the adjusted EBIT margin outperformed expectations at 28.8% compared to the anticipated 26.6%. This demonstrated Masimo’s progress in profitability, which would have resulted in a 50 basis point increase in adjusted EBIT margin guidance if not for the tariffs. However, the updated 2025 adjusted EBIT margin outlook, which does not account for potential mitigations, has been lowered to 25.5-26.4% from the previous 27.5-28.0%, with adjusted EPS projections adjusted to $4.80-$5.15, excluding the impact of potential share buybacks.
Despite facing a cybersecurity incident that has temporarily affected its manufacturing and order processing capabilities, Masimo does not anticipate this issue to impact its guidance. The company has maintained its revenue outlook of $1.50-$1.53 billion, reflecting an 8-11% year-over-year increase on a constant currency basis. Further details on Masimo’s product pipeline, including upgraded sensors and next-generation monitors, are expected to be revealed at an Investor Day scheduled for the fourth quarter.
In summary, while acknowledging that the stock may face downward pressure due to the revised margin outlook, Lavin believes that the range of trade policy scenarios and Masimo’s proactive approach to offsetting tariffs suggest the guidance is achievable. InvestingPro analysis reveals 8 additional key insights about Masimo’s financial position and future prospects, available exclusively to subscribers. For investors seeking deeper analysis, InvestingPro offers a comprehensive research report with detailed valuation metrics, peer comparisons, and expert insights on MASI and 1,400+ other US stocks. The analyst also anticipates some moderation in the tariff impact in 2026 and 2027, with potential share buybacks possibly enhancing adjusted EPS in the future.
In other recent news, Masimo Corporation reported its first-quarter earnings for 2025, beating analysts’ expectations with an earnings per share (EPS) of $1.36 compared to the forecasted $1.21. The company’s revenue reached $372 million, slightly surpassing the anticipated $367.84 million, driven by strong growth in consumables and capital equipment sales. Despite this earnings beat, Masimo’s stock saw a decline of 6.33% in after-hours trading. The company also announced its plan to divest its Consumer Audio business, aiming to refocus on its core healthcare operations. Analysts from firms like Stifel and Wells Fargo (NYSE:WFC) have shown interest in Masimo’s strategies to mitigate potential tariff impacts, which are expected to affect operating margins. Additionally, Masimo is preparing for the launch of its hemodynamic monitoring system in 2026, leveraging its leadership in pulse oximetry through AI-based innovations. The company maintains a positive outlook for the year, projecting full-year revenue between $1.5 billion and $1.53 billion. Meanwhile, Masimo welcomed Lisa Hellman as the new Chief Human Resources Officer, highlighting its commitment to fostering strong engagement and developing talent.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.