On Monday, Masimo Corp . (NASDAQ:MASI) received an upgrade from a Piper Sandler analyst, shifting the stock's rating from Neutral to Overweight. Accompanying this upgrade is a new price target set at $160.00, a significant increase from the previous target of $126.00.
The analyst's decision to raise the rating is based on a positive outlook for the company's shareholders, citing a "higher likelihood than not of making money from current levels."
This optimism persists despite recent non-fundamental irregularities observed in the first quarter, which the analyst now views with more comfort after recent weeks' assessment.
The upbeat stance is further supported by improvements in Masimo's core Healthcare business, with expectations for board shipments to show sequential gains in the second quarter.
Additionally, the management's pledge to adhere to a more consistent path of margin expansion contributes to the favorable perspective.
The analyst also anticipates that the preannounced second-quarter results will be robust and suggests that forthcoming long-term financial plans from the company's management could further validate the current attractive entry point for investors. This is seen as offering a high probability of upside for those holding Masimo shares.
InvestingPro Insights
Following the Piper Sandler analyst's upgrade of Masimo Corp. (NASDAQ:MASI), InvestingPro data and insights provide additional context for investors considering the company's prospects. With a market capitalization of $6.61 billion and a high price-to-earnings (P/E) ratio of 75.3 based on the last twelve months as of Q1 2024, Masimo is trading at a premium compared to the industry average. This is underscored by the company's high earnings multiple, which suggests the market has high expectations for future earnings growth.
Despite a decline in revenue growth of 13.96% over the last twelve months as of Q1 2024, Masimo maintains a strong gross profit margin of 48.61%. This indicates the company's ability to retain a significant portion of its sales as gross profit. Additionally, InvestingPro Tips highlight that Masimo's liquid assets exceed its short-term obligations, providing financial flexibility, and the company operates with a moderate level of debt, which may appeal to risk-averse investors.
For those interested in deeper analysis, InvestingPro offers further insights, including additional InvestingPro Tips that can be accessed at https://www.investing.com/pro/MASI. With the use of coupon code PRONEWS24, new users can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of investment knowledge. The platform lists 11 additional tips for Masimo, which could be instrumental in informing investment decisions.
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