Masimo Corp . (NASDAQ:MASI) announced a significant change in its executive team, with CEO Joe Kiani stepping down and Michelle Brennan taking over as interim CEO. Brennan, who joined Masimo's board in 2023 and was a board candidate from Politan, brings experience from her time at Johnson & Johnson, where she managed medical device and consumer pharmaceutical businesses.
The company has engaged Korn Ferry (NYSE:KFY) to assist in the search for a permanent CEO. Meanwhile, Masimo's board is actively reviewing options for its consumer audio and healthcare segments, with updates on value-creation strategies expected soon.
In addition to the leadership transition, the company confirmed that key executives, including CFO Micah Young and COO Bilal Muhsin, will remain with Masimo. This news comes after previous statements indicating Muhsin would resign if Politan took control of the board. The retention of these executives may provide some stability during the transition period.
Masimo also reiterated its third-quarter non-GAAP financial guidance, projecting revenues between $495 million and $515 million, aligning with a consensus estimate of $503 million. The company's earnings per share (EPS) forecast is set at $0.81 to $0.86, compared to FactSet's estimate of $0.84.
Despite the leadership changes and ongoing strategic reviews, Masimo's stock maintains a Hold rating, reflecting a cautious stance amid potential future surprises. The current share price, trading at approximately 30 times the estimated 2025 earnings, is notably higher than its small to mid-cap growth at a reasonable price (GARP) peers, which trade around 18 times earnings.
In other recent news, Masimo Corporation confirmed its third-quarter financial guidance, following the appointment of Michelle Brennan as interim CEO. The leadership transition came after Joe Kiani's resignation, with BTIG maintaining a Buy rating on Masimo shares. The company's board is also actively evaluating strategic options for its consumer audio and health divisions. On the analyst front, Needham retained a Hold rating, citing potential short-term challenges, while Piper Sandler continued its Overweight rating.
Masimo's board composition has been a topic of discussion, with Egan-Jones recommending shareholders vote for Masimo's director nominees, Joe Kiani and Christopher Chavez, at the upcoming annual meeting. Meanwhile, the company is exploring options for the separation of its consumer business, following a 23% increase in healthcare revenue and securing new hospital conversion contracts worth $134 million.
InvestingPro Insights
As Masimo Corp. (NASDAQ:MASI) navigates through its executive transition and strategic reviews, real-time data from InvestingPro provides a snapshot of the company's financial position. Masimo's market capitalization stands at $7.16 billion, reflecting investor valuation of the firm. The Price-to-Earnings (P/E) ratio, which measures market expectations of earnings growth, is currently high at 88.99, indicating that the stock is trading at a premium compared to earnings. However, the company's revenue in the last twelve months as of Q2 2024 was $2.016.9 million, highlighting a slight decline of 7.76% year-over-year, which investors may want to consider when assessing the company's growth trajectory.
InvestingPro Tips suggest that while analysts expect net income growth this year, there have been downward revisions in earnings estimates by four analysts for the upcoming period. This mixed outlook is further complicated by the company's high earnings multiple, which may raise questions about valuation. On the positive side, Masimo has demonstrated a significant return over the last week, with a 10.38% price total return, which could be indicative of market optimism around the recent changes.
For those interested in a deeper analysis, InvestingPro offers additional tips on Masimo, including insights on the company's liquidity, debt levels, and profitability. With more tips available on the InvestingPro platform, investors can gain a comprehensive understanding of Masimo's financial health and make informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.