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Masimo's (MASI) Q4 Earnings Surpass Estimates, Margins Up

·5 min read

Masimo Corporation MASI delivered adjusted earnings per share (“EPS”) of $1.21 in the fourth quarter of 2021, up 23.5% year over year. The figure surpassed the Zacks Consensus Estimate by 10%.

The adjustments include acquisition, integration and related costs, among others.

GAAP EPS for the quarter was $1.18, down by 2.5% from the year-earlier figure.

Full-year adjusted EPS was $3.99, reflecting a 10.8% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 2.8%.

Revenues in Detail

Masimo registered revenues of $327.6 million in the fourth quarter, up 11% year over year on a reported basis. The figure also surpassed the Zacks Consensus Estimate by 2.6%.

At constant exchange rate (“CER”), revenues grew by 11.5%.

Per management, shipments of non-invasive technology boards and instruments, excluding handheld and fingertip pulse oximeters, were 76,000 in the fourth quarter of 2021. The company also recorded a 15% increase in single-patient-use sensor’s worldwide sales volume on the back of strong demand for its set sensors.

Full-year revenues were $1.24 billion, reflecting an 8.3% improvement from the year-ago period. The metric topped the Zacks Consensus Estimate by 0.8%.

At CER, revenues grew by 7.6%.

Masimo Corporation Price, Consensus and EPS Surprise

Masimo Corporation Price, Consensus and EPS Surprise
Masimo Corporation Price, Consensus and EPS Surprise

Masimo Corporation price-consensus-eps-surprise-chart | Masimo Corporation Quote

Margin Analysis

In the quarter under review, Masimo’s gross profit rose 14.9% to $214.9 million. Gross margin expanded 225 basis points (bps) to 65.6%.

Selling, general & administrative expenses climbed 15.2% to $104.1 million. Research and development expenses went up 5.3% year over year to $33.4 million. Adjusted operating expenses of $137.5 million increased 12.7% year over year.

Adjusted operating profit totaled $77.4 million, reflecting a 19.3% uptick from the prior-year quarter. Adjusted operating margin in the fourth quarter expanded by 164 bps to 23.6%.

Financial Position

Masimo exited full-year 2021 with cash and cash equivalents of $745.3 million compared with $641.4 million at the end of 2020.

Cumulative net cash flow from operating activities at the end of full-year 2021 was $264.8 million compared with $210.9 million a year ago.

Masimo repurchased $128.9-million worth of common stock at the end of 2021 compared with $110.5-million worth of common stock a year ago.

2022 Guidance

Masimo has initiated its full-year 2022 financial outlook.

Total revenues are now projected at $1,350 million, reflecting reported growth of 8.9%. The Zacks Consensus Estimate for the metric is currently pegged at $1.34 billion.

At CER, full-year 2022 revenue growth is expected to be 9.5%.

Adjusted EPS for 2022 is projected at $4.34. The Zacks Consensus Estimate for the same is pegged at $4.33.

Our Take

Masimo exited the fourth quarter with better-than-expected results. Robust uptick in the top line is encouraging. The company recorded a strong rebound in sensor sales (on the back of strong demand for set sensors), along with robust order shipments, which is encouraging. Expansion of the company’s installed base is also impressive. The company introducing the Masimo W1 Continuous Health Monitoring Watch during the quarter and launching the Dual SET Pulse Oximetry for Root in November 2021 are stellar achievements as well. A slew of favorable studies on Masimo’s products and enhancement to its telehealth capabilities also raise our optimism. Expansion of both margins bodes well for the stock.

On the flip side, the company faces fierce competition from MedTech bigwigs, raising our apprehension.

Zacks Rank & Key Picks

Masimo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are GlaxoSmithKline plc GSK, Molina Healthcare, Inc. MOH and Henry Schein, Inc. HSIC.

GlaxoSmithKline, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GlaxoSmithKline has an estimated long-term growth rate of 6.8%. GSK’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 20.5%.

Molina Healthcare reported fourth-quarter 2021 adjusted EPS of $2.88, which surpassed the Zacks Consensus Estimate by 2.1%. Fourth-quarter revenues of $7.41 billion outpaced the Zacks Consensus Estimate by 3.9%. It currently carries a Zacks Rank #2.

Molina Healthcare has an estimated long-term growth rate of 18.8%. MOH’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 5%.

Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #2.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%.


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