Masimo (MASI): Losses Rise 53% Annually, Profitability Turnaround in Focus vs Bearish Narratives

Masimo (MASI) remains unprofitable, with losses growing at an annualized rate of 53.1% over the past five years. Looking ahead, earnings are expected to climb 12.03% per year with a return to profitability forecast within three years, outpacing average market growth. The stock trades at $142.14, which is below its estimated fair value of $157.06. Revenue is projected to grow at 6.5% per year, which is slower than the broader US market's 10.5% pace.

See our full analysis for Masimo.

Next, we'll see how Masimo's latest numbers compare to the widely followed narratives. This will highlight where the consensus view matches up or gets put to the test.

See what the community is saying about Masimo

Margins Set for Big Swing: -12.5% to 15.9%

• Analysts expect profit margins to flip from -12.5% today to 15.9% within three years, signaling a major turnaround if realized.
• According to the analysts' consensus view, the focus on operational efficiency and investments in next-gen monitoring tech is expected to spark much stronger profitability.
  • Plans to redeploy advanced sensors and automate more workflows are seen as levers for driving higher gross margins in the coming years.
  • However, exposure to tariffs and customer consolidation may keep margin volatility in play; execution on cost reduction is crucial.
• With such bold margin expansion built into analyst expectations, early signs of progress could challenge the consensus view. See how the market is weighing this inflection point in the full consensus narrative. 📊 Read the full Masimo Consensus Narrative.

Industry Valuation Gap: 3.6x vs 2.9x

• Masimo’s Price-to-Sales ratio of 3.6x is higher than the US Medical Equipment industry average of 2.9x, but it sits below the peer group average of 4.4x, highlighting an in-between valuation.
• The analysts' consensus notes that while Masimo trades at a premium to the broader industry, its valuation is more favorable when stacked against direct competitors.
  • A lower P/S versus peers suggests investors see relative upside if Masimo’s specialty expansion strategy pays off.
  • However, the higher ratio than the industry reinforces the need for Masimo to prove it can deliver on projected earnings growth.

DCF Discount to Current Price: $142.14 vs $157.06

• The stock trades at $142.14, nearly 10% below its DCF fair value estimate of $157.06, suggesting a potential discount for investors who believe in the turnaround.
• The analysts' consensus points out that Masimo’s current share price offers a margin of safety for those confident in future profit growth, especially alongside a consensus analyst target of 186.57.
  • This gap between current price and both intrinsic and analyst targets may attract buyers if the company delivers on planned operational improvements.
  • Given projected earnings of $293.5 million in 2028, confidence in execution could be rewarded; investors should be mindful of ongoing risks to top-line stability and contract timing.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Masimo on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Masimo research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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While Masimo is forecast to swing from steep losses to profitability, its slower revenue growth and volatile margins introduce meaningful uncertainty compared to steadier performers.

If reliable, consistent results matter to you, use stable growth stocks screener (2073 results) to focus on companies delivering steady growth and resilience through changing market conditions.

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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