Masimo Wins a Major Hospital Client - Analyst Blog

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Masimo Corporation ( MASI ), a leader in non-invasive monitoring technology for patient care, and Easton Hospital of Pennsylvania recently revealed that Masimo is installing a patient monitoring set up, namely Masimo rainbow Pulse CO-Oximetry know-how and Masimo Patient SafetyNet.

Easton Hospital is a major academic hospital catering to over 300,000 inhabitants in Northampton County of Pennsylvania and its adjacent areas. The hospital, which opened in 1890, provides cardiac care, emergency room and other vital services.

Masimo Patient SafetyNet non-intrusively monitors the physiological state of as many as 80 patients using Signal Extraction Pulse Oximetry. The Patient SafetyNet set up timely finds deviations that indicate deteriorating health conditions. It then sends an automatic message to the concerned medical practitioner, thereby facilitating care in good time.

Furthermore, Easton Hospital will utilize the portable Masimo Pronto CO-Oximeter for non intrusively monitoring pulse rate, total hemoglobin and other parameters without needle penetration. Pronto is derived from Masimo Rainbow SET know how which provides continuous and timely gauge of blood components and breathing rates.     

Earlier, in the second quarter of 2012, Masimo completed the strategic acquisition of PHASEIN AB of Sweden. The purchase price was $30 million. PHASEIN is a provider of sidestream and mainstream capnography offerings. It had sales of about $10 million.

This acquisition provides the company with another set of measurable variables using its know-how. It is expected that earnings per share will be neutral in 2013 and subsequently turn accretive.

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.

Shipments have been growing at a steady rate fueled by new contracts. However, the renewal of the royalty agreement with Covidien ( COV ) provides little or no benefit due to lower rates. Further, competition is intense and Masimo partly depends upon its OEM partners for sales. Our Neutral recommendation is supported by a short-term Zacks #3 Rank (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: COV , MASI

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