Masimo Corporation MASI announced preliminary financial results for fourth-quarter 2023 on Jan 10. Following this release, shares of the company lost 0.5% till the last trading session.
The company is scheduled to release its fourth-quarter results on Feb 27, after the closing bell.
Prelim Q4 in Detail
Per the preliminary release, fourth-quarter 2023 consolidated revenues are likely to range from $541 million to $551 million. The Zacks Consensus Estimate is pegged at $541.3 million.
Healthcare revenues are expected to range from $336 million to $341 million, while non-healthcare revenues are expected between $205 million and $210 million.
Full-Year Prelim Results
Per Masimo, its full-year consolidated revenues are likely to range from $2,041 million to $2,051 million. The Zacks Consensus Estimate is pegged at $2.04 billion.
Full-year 2023 Healthcare revenues are estimated between $1,272 million and $1,277 million, while non-healthcare revenues are expected to be in the range of $769-$774 million.
2024 Guidance
Management has issued its outlook for the full year.
However, it should be noted that Masimo is updating its non-GAAP financial measures to exclude the impact of all expenses related to its litigation against Apple, effective fiscal year 2024. The company had previously only excluded the expenses related to the U.S. International Trade Commission litigation against Apple.
Management expects its full-year 2024 consolidated revenues to range from $2,045 million to $2,165 million. The Zacks Consensus Estimate is pegged at $2.12 billion.
Full-year 2023 Healthcare revenues are estimated between $1,345 million and $1,385 million, while non-healthcare revenues are expected to lie in the range of $700-$780 million.
Adjusted earnings per share for 2024 are expected in the range of $3.00-$3.15 (prior definition) and $3.44-$3.60 (updated definition). The Zacks Consensus Estimate is pegged at $3.12.
Per Masimo, the prior definition refers to litigation-related expenses and settlements, while the updated definition includes all the litigation expenses related to Apple.
A Brief Q4 Analysis
On the third-quarter 2023earnings callin November 2023, management stated that its healthcare business is currently navigating away from COVID-era conditions. However, despite sequential improvements from the second quarter, sensor utilization remained below the prior trend and hospital budget pressures continued to slow the pace of equipment installations. This had kept sensor utilization below management’s expectations for the second half of the year. This is likely to have weighed on Masimo’s fourth-quarter 2023 results.
On the same call, management also confirmed that on the consumer side, Masimo continued to realize strong growth for hearables, a key focus area for the company. Per management, the rapid uptake of its hearable products has been helping to partially offset the challenging consumer environment that the premier audio brands are facing for audio components and home entertainment systems. This trend is likely to have continued in the to-be-reported quarter, thereby driving up the non-healthcare revenues.
In December, Masimo received the FDA’s clearance for Stork for prescription use with healthy and sick infants aged 0-18 months. In November, MASI announced the receipt of the FDA’s 510(k) clearance for over-the-counter and prescription use of the Masimo W1 medical watch. These raise our optimism about the stock.
Price Performance
Shares of the company have gained 33.7% between Oct 1 and Dec 30, 2023 compared with the industry’s 10.1% rise and the S&P 500’s 10.6% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Currently, Masimo carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, Merit Medical Systems, Inc. MMSI and Cardinal Health, Inc. CAH.
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the last trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita has gained 10.8% compared with the industry’s 11.9% rise between Oct 1 and Dec 30, 2023.
Merit Medical, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 14.4%.
Merit Medical has gained 10.1% compared with the industry’s 2.1% rise between Oct 1 and Dec 30, 2023.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.3%. CAH’s earnings surpassed estimates in each of the last trailing four quarters, with the average surprise being 15.7%.
Cardinal Health has gained 16.1% compared with the industry’s 2.1% rise between Oct 1 and Dec 30, 2023.
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