Analyst Estimates: Here's What Brokers Think Of Masimo Corporation (NASDAQ:MASI) After Its First-Quarter Report

Last week, you might have seen that Masimo Corporation (NASDAQ:MASI) released its quarterly result to the market. The early response was not positive, with shares down 8.9% to US$124 in the past week. The result was positive overall - although revenues of US$493m were in line with what the analysts predicted, Masimo surprised by delivering a statutory profit of US$0.35 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Masimo

Following the latest results, Masimo's nine analysts are now forecasting revenues of US$2.10b in 2024. This would be an okay 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 31% to US$1.95. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.10b and earnings per share (EPS) of US$2.00 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$152, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Masimo analyst has a price target of US$170 per share, while the most pessimistic values it at US$125. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Masimo's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.3% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% annually. So it's pretty clear that, while Masimo's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$152, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Masimo analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Masimo that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.