On Wednesday, Piper Sandler adjusted its price target on shares of Masimo Corp . (NASDAQ:MASI) to $126 from $117 while maintaining a Neutral rating on the stock. The adjustment follows Masimo's announcement of first-quarter revenue and adjusted earnings per share that exceeded expectations. The company's management has raised its full-year guidance.
Masimo's recent financial performance has been strong, with the company posting quarterly figures above analyst predictions. This has prompted management to increase its guidance for the full year. Despite these positive financial developments, Piper Sandler's stance on Masimo remains unchanged due to several ongoing concerns.
The firm points to various issues that are currently at the forefront of Masimo's narrative, beyond its quarterly performance. These include the proposed separation of its Consumer division, the operating margin implications for the remaining Healthcare business once the Consumer segment is removed from the profit and loss statement, and the relevance of closely monitored board shipments for revenue forecasting. The company is facing newly disclosed investigations by the Department of Justice and the Securities and Exchange Commission.
Moreover, the recent resignation of a board member who was appointed just six months ago and is up for re-election this year adds to the list of peculiar developments at Masimo. Piper Sandler acknowledges that Masimo's financial health is improving and that management's commitment to enhanced profitability is a positive step. Still, the surrounding complexities have led the firm to maintain its Neutral rating on the stock, as it contemplates what the future may hold for the company.
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