It has been about a month since the last earnings report for Masimo (MASI). Shares have lost about 0.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Masimo due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Masimo Earnings and Revenues Beat Estimates in Q2
Masimo Corporation reported second-quarter 2020 adjusted earnings per share of 85 cents, which surpassed the Zacks Consensus Estimate of 78 cents by 8.9%. Earnings improved 11.8% from the year-ago quarter.
Total revenues (including Royalty) improved 31.1% year over year to $301 million and beat the Zacks Consensus Estimate of $289.33 million by 4%.
Segmental Analysis
Product Revenues
Product revenues in the second quarter totaled $301 million, up 31.1% from the year-ago quarter and 32% at constant currency (cc).
Per management, shipments of non-invasive technology boards and monitors surged 174% to a record 165600 in the quarter.
Margin Analysis
In the quarter under review, gross profit totaled $191.6 million, up 24.1% year over year. Gross margin was 63.6%, down 355 basis points (bps).
Adjusted operating profit in the quarter totaled $62.2 million, up 19.7% from a year ago. Adjusted operating margin contracted 196 bps to 20.7% in the quarter.
2020 Guidance
Given the uncertainties surrounding the COVID-19 pandemic and its impact on the company’s normal business patterns, Masimo has not issued any guidance for 2020.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -10.89% due to these changes.
VGM Scores
Currently, Masimo has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Masimo has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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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.
