Here's Why You Should Buy Masimo (MASI) Stock Right Now
Masimo Corporation MASI has been gaining investor confidence on continued positive results. Over the past year, the stock has rallied 54% compared with the industry’s 8% gain. Also, the company has outperformed the S&P 500’s 2.5% rally.
The company has an encouraging earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the trailing three quarters, the average being 4.3%. Notably, this trend of consecutive beats underlines its operating efficiency. A solid fourth-quarter show and a slew of developments are working in favor of the stock.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive investment pick for now.
What’s Working in Favor?
Q4 Results
In the recently-reported fourth quarter, Masimo’s adjusted earnings per share came in at 83 cents, surpassing the Zacks Consensus Estimate by 15.3%. Earnings improved from the year-ago quarter’s loss of 15 cents.
Revenues improved 7.3% year over year to $223.1 million and edged past the Zacks Consensus Estimate of $220 million.
Reflective of these, Masimo expects 2019 revenues of $912 million, reflecting year-over-year growth of 10.7% and 9.9% at constant currency.
Adjusted product earnings per diluted share of $3.08 reflect an increase of 16.2% from 2018.
Developments
Masimo saw a slew of developments in recent times.
The company recently announced CE marking of its Next Generation SedLine brain function monitoring for pediatric patients, making it available for patients aged one year and above.
Last month, Masimo announced a collaboration with the Saudi Arabia Ministry of Health to implement a solution designed to streamline the process of critical congenital heart disease screening of newborns, using Masimo SET. (Read More: Masimo and Saudi Arabia MOH Collaborate for CCHD Screening)
Additionally, the company launched Doctella, a home-based patient engagement and remote care automation platform which provides a complete end-to-end home care solution, allowing clinicians to create and manage treatment plans.
Masimo Corporation Price and Consensus
Masimo Corporation Price and Consensus | Masimo Corporation Quote
Which Way Are Estimates Treading?
The Zacks Consensus Estimate for first-quarter earnings per share is pegged at 75 cents. The same for revenues stands at $223.2 million, indicating an 4.8% rise.
For the full year, the Zacks Consensus Estimate for earnings is at $3.05. The same for revenues stands at $912.9 billion, indicating an 6.4% rise.
Bottom Line
Masimo seems to be positioned for growth on solid fourth-quarter results and a series of positive developments. The company's long-term earnings growth rate of 15.6% also supports our view.
Key Picks
Some better-ranked stocks from the broader medical space are Bio-Rad Laboratories, Inc. BIO, Surmodics, Inc. SRDX and Meridian Bioscience Inc. VIVO. While Bio-Rad and Surmodics sport a Zacks Rank #1 (Strong Buy), Meridian carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bio-Rad’s long-term earnings growth rate is projected at 15%.
Surmodics’ long-term earnings growth rate is expected at 10%.
Meridian’s current-year earnings growth rate is estimated at 2.7%.
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