), a leader in non-invasive monitoring technology for patient
care, recently disclosed that Maricopa Integrated Health System
has set up Masimo Patient SafetyNet. This marks yet another major
client win for Masimo which continues to expand its client base,
as Maricopa has one of the highest footfalls compared with other
hospital systems in Arizona.
Maricopa deployed Masimo's offering in a concerted effort to
standardize to Masimo SET Measure-Through Motion and Low
Perfusion pulse oximetry and rainbow SET Pulse CO-Oximetry.
Masimo Patient SafetyNet includes Masimo SET or rainbow SET
monitors. Going forward, the increasing adoption of the company's
well-regarded products will act as a positive catalyst.
Masimo is a market leader in the pulse oximetry monitoring
equipment industry. The company's prospects are encouraging,
given the sizeable global market opportunity, adoption of pulse
oximetry in non-critical areas of the hospital, and growing
barriers to entry due to additional non-invasive parameters.
Another material upside is the rising proportion of recurring
revenues on the back of growing installed base. For its SET
offering, Masimo continues to surpass the market growth rate with
a year-over-year improvement of 11% in its worldwide installed
base in the third quarter. While Masimo's patented SET offering
remains its mainstay, the rainbow measurements represent another
growth driver beyond hospital care.
However, the company's reliance on third-party providers like
OEMs for a part of its business and customer concentration raises
concern. Additionally, we remain concerned about Masimo's
reliance on group purchasing organizations for the sale of its
pulse oximetry products to hospitals in the domestic market.
We also note
) effort to expand its oximetry and monitoring products
portfolio. The company recently won U.S. Food and Drug
Administration (FDA) 510(k) approval as well as European Economic
Area (EEA) CE Mark clearance for its Nellcor Bedside Respiratory
Patient Monitoring system.
We currently have a long-term 'Neutral' recommendation on Masimo.
The stock carries a Zacks #3 Rank, which translates into a
short-term Hold rating.
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