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Piper Sandler maintains Overweight on Masimo stock

EditorAhmed Abdulazez Abdulkadir
Published 06/25/2024, 11:22 AM
MASI
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On Tuesday, Masimo Corp . (NASDAQ:MASI) received a reaffirmation of confidence from Piper Sandler, with the firm maintaining an Overweight rating and a $160.00 price target on the company's stock. This endorsement follows a recent dinner event hosted by Piper Sandler, which included Masimo's CEO Joe Kiani and CFO Micah Young, along with investors.

The key points from the event highlighted Masimo's commitment to steering the business back to its pre-pandemic performance. Management has outlined a strategy focused on achieving more predictable revenue, a credible plan for gross margin (GM%) and operating margin (OM%) expansion, and the introduction of new products aimed at enhancing patient monitoring and hospital efficiency.

Masimo's leadership expressed their roadmap for the company's future, emphasizing consistent revenue streams and margin improvements. These factors are seen as integral to Masimo's growth and are part of the rationale behind Piper Sandler's reiterated rating and price target.

The company's innovation pipeline was also a topic of discussion. Masimo plans to continue its tradition of launching products that advance patient care and increase hospital operational effectiveness. This steady flow of new offerings is expected to contribute to the company's overall success and market position.

Piper Sandler's reiteration of the Overweight rating and $160 price target reflects a positive outlook on Masimo's strategic initiatives and potential for growth. The firm's analysis suggests confidence in Masimo's ability to navigate post-pandemic challenges and capitalize on opportunities for expansion and innovation.

In other recent news, Masimo Corporation has reported impressive Q1 2024 earnings, with healthcare revenues reaching $340 million. This performance, bolstered by significant sensor orders in the U.S. and Europe, aligns with the high end of their guidance and indicates a market share expansion. The company has also successfully relocated sensor production to Malaysia, enhancing gross margins. Consequently, Masimo has raised its guidance for healthcare revenues and non-GAAP EPS based on these positive results and an optimistic hospital census outlook for 2024.

In a significant development, the company's board of directors is urging shareholders to support its director nominees, Joe Kiani and Christopher Chavez, in the upcoming Annual Meeting of Stockholders. The board warns against the agenda of Politan Capital Management, which it claims could undermine Masimo's innovation and devalue the company.

Furthermore, the company has received a recent upgrade from Piper Sandler, shifting the stock's rating from Neutral to Overweight. This upgrade is based on a positive outlook for the company's shareholders and improvements in Masimo's core Healthcare business.

Additionally, Masimo is currently evaluating strategic options for its consumer business, including a potential spin-off or sale, which could further improve non-GAAP operating margins for its healthcare segment.

InvestingPro Insights

Following the reaffirmation from Piper Sandler, current data from InvestingPro provides a deeper look into Masimo Corp.'s (NASDAQ:MASI) financial health and market sentiment. With a market capitalization of around $6.83 billion and a high P/E ratio of 86.31, investors are pricing in expectations for future earnings growth. This optimism is supported by the fact that the company is expected to grow net income this year, as per one of the InvestingPro Tips. Additionally, Masimo's liquid assets are reported to exceed short-term obligations, indicating a solid liquidity position which aligns with its strategy for consistent revenue streams and margin improvements discussed at the recent event hosted by Piper Sandler.

However, it's important to note that six analysts have revised their earnings downwards for the upcoming period, which could signal caution. Despite this, the company's strong return over the last decade and projections for profitability this year suggest underlying resilience. For readers looking to delve deeper into Masimo's financials and market performance, InvestingPro offers additional insights, including a fair value estimation of $126.9 USD. Those interested in comprehensive analysis can explore further by using the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, where 10 more InvestingPro Tips are available for Masimo Corp.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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