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IRVINE, Calif. - Masimo Corporation (NASDAQ:MASI), a medical technology innovator with a current market capitalization of $8.72 billion, has agreed to divest its Sound United consumer audio business to HARMAN International, a subsidiary of Samsung Electronics Co., Ltd., for $350 million in cash. According to InvestingPro analysis, Masimo is currently trading above its Fair Value, with the stock price at $161.47. The transaction, subject to customary adjustments and regulatory approvals, is anticipated to conclude by the end of 2025.
This strategic move is designed to sharpen Masimo’s focus on its core professional healthcare business, which generated $2.09 billion in revenue over the last twelve months. The company operates with a moderate level of debt and maintains a healthy current ratio of 1.98x. The sale is a result of Masimo’s review of its consumer audio division and aligns with its objective to accelerate revenue growth while maintaining disciplined margins.
Quentin Koffey, Vice Chairman of Masimo’s Board of Directors, emphasized the significance of the divestiture as a critical step in advancing the company’s growth and operational efficiency goals. He expressed confidence in Masimo’s healthcare-centered strategy and leadership to capitalize on the company’s positive trajectory.
The acquisition is poised to bolster HARMAN’s portfolio, adding renowned audio brands such as Bowers & Wilkins, Denon, and Marantz to its existing lineup, which includes JBL and Harman Kardon. Dave Rogers, President of HARMAN’s Lifestyle division, noted that the transaction will strengthen their value proposition and expand their product offerings across various audio categories.
Katie Szyman, Chief Executive Officer of Masimo, stated that the sale is consistent with her leadership’s focus on growth and efficiency. She conveyed her belief that the consumer audio business will thrive under HARMAN’s stewardship.
Financial advisory services for the transaction were provided to Masimo by Centerview Partners LLC and Morgan Stanley & Co. LLC, with Sullivan & Cromwell LLP serving as legal advisor.
Masimo is a global entity that delivers advanced monitoring technologies and solutions in the medical field. HARMAN, acquired by Samsung Electronics in 2017, is recognized for its connected products and solutions, including audio systems, across various industries.
The information in this article is based on a press release statement. Analysts maintain a positive outlook on Masimo, with seven analysts recently revising their earnings estimates upward. InvestingPro subscribers have access to 12 additional exclusive ProTips and comprehensive financial analysis for Masimo, including detailed valuation metrics and growth forecasts. For deeper insights, check out the Pro Research Report, part of the extensive coverage available for 1,400+ US stocks on InvestingPro.
In other recent news, Masimo Corporation reported its fourth-quarter 2024 earnings, delivering an earnings per share (EPS) of $1.80, significantly surpassing the forecasted $1.42. The company also exceeded revenue expectations, reporting $600.7 million compared to the anticipated $591.64 million. This strong performance was accompanied by a 46% increase in operating profit, with notable improvements in operating margins. Masimo has provided an optimistic outlook for 2025, projecting healthcare revenue growth of 8-10% and setting non-GAAP EPS guidance between $5.10 and $5.40, indicating a growth of 22-29%.
Additionally, BTIG analyst Sean Lavin raised the price target for Masimo shares to $206 from $178, maintaining a Buy rating. This adjustment reflects Masimo’s progress in margin expansion and effective cost structure optimization. The company has updated its FY25 Healthcare operating margin guidance to a range of 27.5-28.0%, a notable year-over-year expansion. Furthermore, Masimo has reaffirmed its 2025 guidance for healthcare revenue, reflecting an 8-11% year-over-year increase. These recent developments highlight Masimo’s strategic focus on research and development initiatives with high returns on investment.
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