Masimo Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Masimo Corporation (NASDAQ:MASI) filed its full-year result this time last week. The early response was not positive, with shares down 2.6% to US$129 in the past week. Masimo reported US$2.0b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.51 beat expectations, being 5.7% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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

After the latest results, the eight analysts covering Masimo are now predicting revenues of US$2.10b in 2024. If met, this would reflect an okay 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 29% to US$1.99. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.09b and earnings per share (EPS) of US$1.97 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.5% to US$128. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Masimo at US$145 per share, while the most bearish prices it at US$117. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Masimo's revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Masimo.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Masimo going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Masimo (1 is significant!) that we have uncovered.

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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.