Masimo Stock To $122?

Masimo (MASI) stock has jumped 34% during the past day, and is currently trading at $174.69. Our multi-factor assessment suggests that it may be time to sell MASI stock. We have, overall, a pessimistic view of the stock, and a price of $122 may not be out of reach. We believe there are only a couple of things to fear in MASI stock given its overall Moderate operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $9.4 Bil in market cap, Masimo provides noninvasive monitoring technologies, including advanced pulse oximetry with motion tolerance and brain function monitoring through EEG-based SedLine technology.

[1] Valuation Looks Very High

This table highlights how MASI is valued vs broader market. For more details see: MASI Valuation Ratios

[2] Growth Is Strong

• Masimo has seen its top line grow at an average rate of 11.4% over the last 3 years
• Its revenues have grown 38% from $1.6 Bil to $2.2 Bil in the last 12 months
• Also, its quarterly revenues grew 8.2% to $372 Mil in the most recent quarter from $343 Mil a year ago.

This table highlights how MASI is growing vs broader market. For more details see: MASI Revenue Comparison

[3] Profitability Appears Very Weak

• MASI last 12 month operating income was $133 Mil representing operating margin of 6.1%
• With cash flow margin of 9.5%, it generated nearly $208 Mil in operating cash flow over this period
• For the same period, MASI generated nearly $-569 Mil in net income, suggesting net margin of about -26.1%

This table highlights how MASI profitability vs broader market. For more details see: MASI Operating Income Comparison

[4] Financial Stability Looks Very Strong

• MASI Debt was $586 Mil at the end of the most recent quarter, while its current Market Cap is $9.4 Bil. This implies Debt-to-Equity Ratio of 6.2%
• MASI Cash (including cash equivalents) makes up $312 Mil of $1.8 Bil in total Assets. This yields a Cash-to-Assets Ratio of 17.2%

[5] Downturn Resilience Is Moderate

MASI saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• MASI stock fell 74.7% from a high of $303.29 on 19 November 2021 to $76.73 on 16 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $190.63 on 3 March 2025 , and currently trades at $174.69

 
2020 Covid Pandemic

• MASI stock fell 20.6% from a high of $186.78 on 13 March 2020 to $148.38 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 April 2020

 
2008 Global Financial Crisis

• MASI stock fell 47.5% from a high of $41.95 on 8 September 2008 to $22.04 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 22 July 2015

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read MASI Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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