Did Broader FDA Clearance for O3 System Just Shift Masimo's (MASI) Investment Narrative?

• On August 18, 2025, Masimo announced that Board member William Jellison had resigned without disagreement, and the company received FDA 510(k) clearance for expanded indications of its O3 Regional Oximetry system, now authorized for use across all patient groups including pediatric and neonatal cases.
• This clearance allows Masimo’s O3 technology to be adopted more widely in both cerebral and somatic settings, potentially expanding its reach and clinical relevance within hospital monitoring applications.
• We'll look at how broader FDA clearance for Masimo's O3 monitoring could impact its growth outlook and current investment narrative.

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Masimo Investment Narrative Recap

To be a shareholder in Masimo, you have to believe in the long-term adoption of innovative hospital monitoring technologies, especially as the company continues to develop and expand use cases for its platform. The recent FDA clearance expanding O3 Regional Oximetry’s indications supports Masimo’s growth outlook, but doesn’t materially impact the most immediate risk: ongoing headwinds from shifting hospital capital spending and delays in contract timing, which still weigh on near-term visibility.

Among recent announcements, the expanded O3 clearance is particularly relevant, as it strengthens Masimo’s position in brain and tissue monitoring for all patient groups, aligning with the company’s efforts to boost market share in early-stage segments. This could act as a catalyst for future contract wins, though success still depends on commercial execution and hospitals’ purchasing behaviors.

By contrast, investors should be especially aware of persistent uncertainty around large, lumpy hospital contracts and the unpredictability of...

Read the full narrative on Masimo (it's free!)

Masimo's narrative projects $1.8 billion in revenue and $293.5 million in earnings by 2028. This requires a 5.1% annual revenue decline and an earnings increase of $563.2 million from current earnings of $-269.7 million.

Uncover how Masimo's forecasts yield a $187.57 fair value, a 26% upside to its current price.

Exploring Other Perspectives

With three separate fair value estimates from the Simply Wall St Community ranging between US$137.02 and US$187.57, expectations vary for Masimo’s true worth. Uncertainty around hospital contract timing remains a central issue for many market participants considering the company’s forward potential.

Explore 3 other fair value estimates on Masimo - why the stock might be worth as much as 26% more than the current price!

Build Your Own Masimo Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Masimo research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Masimo research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Masimo's overall financial health at a glance.

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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.

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