Masimo price target lowered to $70 from $110 at Piper Sandler

Piper Sandler lowered the firm’s price target on Masimo to $70 from $110 and keeps a Neutral rating on the shares following quarterly results. The firm notes that the revenue miss vs. Street and lower-than-expected recovery in sensor volumes is leading management to reassess its financial outlook once again, cutting guidance by $100M at the top line and about 50c at EPS. Like last quarter when guidance was meaningfully reduced, investors are left with many unanswered questions regarding underlying business trends and the direction of margins/earnings for the next several quarters, Piper argues. The visibility challenges that are persisting with Masimo and the considerable margins and earnings power unknowns for 2024 and beyond leave the firm needing to reflect that uncertainty in a lower valuation.