Masimo (MASI): Evaluating Valuation After Strong Quarter, Philips Expansion and New Credit Facility

Masimo (MASI) has given investors a lot to unpack lately, with an upbeat quarter, a freshly expanded Philips partnership, and a new credit facility that adds meaningful financial flexibility to the story.

See our latest analysis for Masimo.

Even with the upbeat quarter, strategic Philips expansion and added firepower from the new credit facility, Masimo’s share price return over the past year remains negative. This highlights that longer term total shareholder returns have been under pressure, while sentiment now looks to be stabilising.

If this kind of healthcare turnaround story has your attention, it is worth seeing what else is out there by exploring healthcare stocks.

With the shares still down sharply over one and five years despite improved results and a sizeable discount to analyst targets, the key question now is whether Masimo is a mispriced turnaround or whether the market already reflects its future growth.

Most Popular Narrative Narrative: 22.9% Undervalued

With Masimo’s fair value estimate sitting well above the last close of $141.28, the prevailing narrative frames today’s price as a meaningful discount driven by future earnings power rather than current headline revenue trends.

Ongoing innovation including next-gen monitors featuring advanced AI algorithms and redeployment of novel sensor technologies positions Masimo to command premium pricing and capture greater value as hospitals prioritize technologically advanced, multiparameter solutions, supporting both revenue expansion and improved gross margins.

Read the complete narrative.

Curious how shrinking top line expectations can still support a richer future profit multiple and higher fair value. The narrative leans on a striking profit margin reset, rapid earnings growth and a valuation hurdle more commonly reserved for market darlings. Want to see which assumptions have to land almost perfectly to make that math work.

Result: Fair Value of $183.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heightened tariff exposure and slower hospital equipment spending could pressure margins and delay the earnings reset that this bullish narrative depends on.

Find out about the key risks to this Masimo narrative.

Another Angle on Valuation

While the narrative leans on future earnings power to argue Masimo is 22.9 percent undervalued, our SWS fair ratio based on the price to sales metric tells a different story. At 3.5 times sales versus a fair ratio of 1.5 times, the shares look richly priced relative to the level where the market could eventually settle.

That gap suggests downside risk if growth disappoints, even though Masimo trades in line with the broader US medical equipment group and below peer averages. This leaves investors to decide which signal deserves more weight.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Masimo Narrative

If you want to dig into the numbers yourself or challenge the conclusions here, you can quickly build a personalised view in minutes: Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Masimo.

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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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