News

Masimo Corporation MASI announced preliminary financial results for second-quarter 2024 on Jul 9. Following this release, the company’s shares edged up 0.1% in the after-hours trading session.

The company is expected to release second-quarter results on Aug 13, 2024.

Prelim Q2 in Detail

Per the preliminary release, second-quarter 2024 consolidated revenues are likely to be $496 million, up 9% year over year on a reported basis. The Zacks Consensus Estimate is pegged at $493.5 million.

At constant exchange rate (CER), revenues are expected to improve 10.1% year over year.

Healthcare revenues are expected to be $344 million, up 22.4% on a reported basis and 23.1% at CER year over year.

Non-healthcare revenues are expected to be $152 million, down 12.6% and 10.9% year over year on a reported basis and at CER, respectively.

Per management, the incremental value of new healthcare contracts is expected to be $134 million, while driver shipments are expected to be 58 thousand during the second quarter of 2024.

Guidance

Management plans to provide updated financial guidance for 2024 on the second-quarterearnings call

A Brief Q2 Analysis

Per management, Masimo witnessed strength in its healthcare business in the second quarter, along with a strong order backlog as it enters the third quarter. Sensor utilization and hospital census have also improved from 2023. The company also achieved a record second quarter in terms of converting customers to Masimo’s technologies, with an expected $134 million of incremental contract value. These look promising for the stock.

On first-quarter 2024earnings callin May, management stated that the majority of its sensor production is in Malaysia. Management expects this to provide great opportunities for increases in profitability. Increased contributions from Malaysia are likely to have a positive impact on second-quarter revenues.

In July, the company announced that the Masimo W1 Sport advanced health tracking wearable is now equipped with a new feature — scientifically based sleep analysis with Sleep Halo. In June, Masimo, along with Cleveland Clinic, announced the launch of a new partnership centered around hospital-based remote patient monitoring, including TeleCritical Care. These raise our optimism about the stock.

Price Performance

Shares of the company have gained 14.4% between Apr 1 and Jun 29, 2024, compared with the industry’s 8.3% rise and the S&P 500’s 17.2% growth.

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Zacks Rank & Other Key Picks

Currently, Masimo carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical space are DaVita Inc. DVA, Stryker Corporation SYK and Ecolab Inc. ECL.

DaVita, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DaVita’s shares have gained 14.4% compared with the industry’s 17.2% rise between Apr 1 and Jun 29, 2024.

Stryker, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.6%. SYK’s earnings surpassed estimates in each of the trailing four quarters, with the average being 4.9%.

Stryker has gained 14.2% compared with the industry’s 2.3% rise between Apr 1 and Jun 29, 2024.

Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.3%.

Ecolab’s shares have rallied 21.8% against the industry’s 19.2% decline between Apr 1 and Jun 29, 2024.

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