Masimo
(Nasdaq: MASI)
shares fell slightly despite fourth-quarter results that came in ahead of the consensus forecast.
Shares of MASI dipped 2.6% at $126.76 apiece in midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — fell 0.3%.
The Irvine, California–based patient monitoring technology developer posted profits of $34 million. That equals 63¢ per share on sales of $548.9 million for the three months ended Dec. 30, 2023. Healthcare revenue totaled $339.9 million for the quarter.
Masimo recorded a 17.3% bottom-line slide on a sales decline of 11%.
Adjusted to exclude one-time items, earnings per share came in at $1.25. That landed 38¢ ahead of the forecasts on Wall Street. Sales also topped expectations as analysts expected $545.7 million in revenue.
“We exited 2023 with growing momentum driven by record contract wins for the year in our healthcare business, important FDA clearances for innovative new products and strong growth in our hearables business,” said Masimo Chair and CEO Joe Kiani. “Our ability to translate our core technologies into products that deliver better outcomes for consumers, patients, and providers continues to be the engine for our long-term growth across all our businesses. With stabilization of hospital census and operations post-pandemic, our healthy contract backlog and our cutting-edge innovations in growing markets, Masimo is well-positioned for 2024.”
Masimo expects full-year revenues to range between $2.045 billion and $2.165 billion, with a healthcare sales range of $1.345 billion to $1.385 billion. The company projects adjusted EPS to land between $3.44 and $3.60.
The analysts’ view on Masimo
BTIG analysts Marie Thibault and Sam Eiber note that Masimo’s fourth-quarter revenue came in at the high end of the preannounced range. Healthcare, they said, helped to drive that, while EPS also significantly beat the consensus estimate.
The analysts pointed out lower shipments in the fourth quarter (58,500 compared to their estimate of 60,700). However, they say that’s not a major surprise as it fell in line with prior commentary around softer capital equipment demand. They expect that to continue in the first quarter before gradual improvements thereafter.
“We are not overly concerned about the boards shipped metric impacting revenue growth, since even if some hospitals with tighter capital budgets are extending the life of their existing installed base they will continue to use sensors along with existing sockets,” the analysts wrote.
Thibault and Eiber called Masimo’s fourth-quarter report a “straightforward earnings update.”
“We liked that [Masimo] generated $77M in operating cash this quarter, and we continue to think 2024 [healthcare] sales and margins are achievable. We reiterate our Buy rating on [Masimo],” they wrote.
