Is It Time To Consider Buying Masimo Corporation (NASDAQ:MASI)?

Masimo Corporation (NASDAQ:MASI), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$191 and falling to the lows of US$144. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Masimo's current trading price of US$155 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Masimo’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is Masimo Worth?

Great news for investors – Masimo is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $236.70, but it is currently trading at US$155 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Masimo’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

View our latest analysis for Masimo

What kind of growth will Masimo generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Masimo, it is expected to deliver a negative revenue growth of -15% over the next couple of years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although MASI is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to MASI, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on MASI for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into Masimo, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Masimo, and understanding it should be part of your investment process.

If you are no longer interested in Masimo, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.