California-based Masimo (MASI) is a healthcare technology company that supplies medical sensors for patient monitoring. Let’s take a look at the company’s latest financial performance and risk factors.
Masimo’s Q2 Financial Results and 2021 Outlook
Masimo reported its second-quarter financial results on July 27 and issued updated guidance for full-year 2021.
For Q2, product revenue increased 1.4% year-over-year to $305.1 million. Adjusted EPS came to $0.94, rising from $0.85 in the same period last year.
Masimo CEO Joe Kiani commented, “We are happy to report strong second quarter results. While we expected the drivers and capital orders of 2021 to be lower than we achieved in 2020 due to high demand during the height of COVID-19…we did not anticipate the very strong increase in single-patient-use sensors that we realized this quarter. This produced higher revenues that exceeded expectations for this period.”
The company raised its full-year 2021 revenue guidance to $1.22 billion, representing 6.3% growth from 2020. The previous guidance called for revenue of $1.21 billion. Adjusted EPS has been raised to $3.85 from $3.83. (See Masimo stock charts on TipRanks).
Masimo’s Risk Factors
According to the new Tipranks Risk Factors tool, a total of 58 risk factors have been identified for Masimo. Finance and Corporate is the primary risk category, representing 26% of the total risks. The next two major risk categories are Legal and Regulatory and the Ability to Sell at 22% and 19%, respectively.
Since its Q2 report, Masimo has adjusted its risk profile to remove one risk and change the wording of six other risk factors.
The company dropped a Production category risk factor that covered a broad range of issues. For example, the removed risk factor cautioned that the partnership with Cercacor Laboratories had conditions limiting Masimo’s ability to commercialize its products to certain markets.
It also warned that counterfeit products could cause Masimo to lose market share. Additionally, Masimo cautioned that patent litigation to protect its intellectual rights could increase its expenses and divert management attention.
Masimo’s Finance and Corporate risk factor is below the sector average at 26% versus 33%. Masimo shares have gained about 1.5% since the beginning of 2021.
Analysts’ Take
Last week, Piper Sandler analyst Jason Bednar reiterated a Buy rating on Masimo stock and raised the price target to $300 from $295. Bednar’s new price target suggests 10.14% upside potential. The analyst tells investors that Masimo’s business trends are solid.
Consensus among analysts is a Moderate Buy based on 3 Buys and 2 Holds. The average Masimo price target of $303 implies 11.24% upside potential to current levels.
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