Healthcare Segment Focus - The healthcare segment focuses on noninvasive patient monitoring technologies, with a goal of improving lives by providing patient-centered solutions and expanding into home care [15]. - The healthcare segment's product portfolio includes advanced technologies such as noninvasive hemoglobin monitoring and telehealth solutions [15]. - The Masimo Hospital Automation Platform integrates data and connectivity solutions to improve clinical workflows and patient care [15]. - The Patient SafetyNet solution allows for the simultaneous monitoring of up to 200 patients, enhancing clinician workflows and reducing care costs [25]. - The introduction of Iris connectivity in the Root platform facilitates integration of multiple standalone devices, improving patient care and reducing costs by leveraging existing infrastructure [26]. - The company offers a range of home wellness and remote patient monitoring solutions, including disposable sensors and mobile applications, sold directly to end-users and through distributors [73]. - The company’s remote monitoring solutions provide real-time alerts for opioid-induced respiratory depression, enhancing patient safety [76]. - The company’s hemodynamic monitoring solutions are scalable to each patient's age, height, and weight, enhancing personalized patient care [70]. Innovation and Product Development - The company aims to enhance long-term growth by focusing on innovation, expanding market share, and leveraging existing customer relationships for product offerings [20]. - The company has a proven track record of innovation, with a focus on developing differentiated and clinically superior technologies [20]. - Masimo's rainbow SET platform enables noninvasive monitoring of hemoglobin species, including SpCO and SpMet, which were previously only measurable through invasive procedures [24]. - The Masimo SET platform has been shown to improve clinical outcomes, including reducing severe retinopathy in neonates and enhancing CCHD screening in newborns [22]. - The company has developed a cloud-based patient management platform, Masimo SafetyNet, which features clinical-grade spot-checking and continuous measurements [72]. - The automation suite includes software and hardware that enables third-party devices to connect through Patient SafetyNet, documenting data in the EMR [60]. Financial Performance and Growth Strategy - The company plans to supplement internal growth with strategic acquisitions, investments, and partnerships to expand its product portfolio [20]. - Healthcare revenues from pulse oximetry products to hospitals associated with GPOs reached $794.0 million in 2024, up from $678.1 million in 2023, representing a growth of approximately 17.1% [124]. - The company reported that one just-in-time healthcare distributor represented approximately 18.5% of total healthcare revenue for the year ended December 28, 2024 [121]. - The company’s sales and marketing strategy for pulse oximetry focuses on building end-user awareness of the clinical and cost-saving benefits of its technologies [122]. - The company’s success in the U.S. market largely depends on the ability of healthcare providers to receive reimbursement for monitoring procedures [108]. - The company’s healthcare products are significantly influenced by Medicare's coverage and reimbursement policies, especially since a large percentage are used by Medicare beneficiaries [107]. Regulatory Compliance and Risks - The company is subject to significant government regulations, including compliance with FDA requirements for medical devices, which can impact product marketing and development timelines [82]. - The majority of the company's regulated medical products fit into Class II device types, requiring 510(k) clearance, while some are classified as Class I or exempt [86]. - The company is subject to stringent international, federal, state, and local environmental regulations, which may increase compliance costs [116]. - The company must comply with numerous laws related to data privacy and protection, which may incur incremental costs to modify business practices [113]. - The company’s international operations are subject to the U.S. Foreign Corrupt Practices Act and other global anti-corruption laws, which could result in fines or penalties for non-compliance [105]. - Non-compliance with regulatory requirements could lead to enforcement actions or penalties, harming the company's business [208]. - The company is also subject to inspections by various regulatory authorities, which may have differing standards from the FDA [209]. Intellectual Property and Legal Matters - The company has developed a diverse intellectual property portfolio, holding hundreds of patents and trademarks, which is crucial for maintaining competitive advantage [130]. - The company has a cross-licensing agreement with Willow Laboratories, allowing shared rights to certain intellectual property and technology applications [79]. - The Cross-Licensing Agreement with Willow Laboratories restricts the commercialization of new products and technologies, potentially impairing growth [164]. - The company is currently involved in litigation against Apple Inc. for patent infringement and trade secret misappropriation, which may result in significant legal expenses and management distraction [198]. - The company has entered into a one-year alternative fee agreement for ongoing legal fees related to the litigation against Apple, which could result in additional payments if a favorable judgment is obtained [198]. Market Challenges and Competition - The company’s primary competitor in the healthcare market is Medtronic plc, which holds a substantial share of the pulse oximetry market [120]. - The company faces risks related to the market acceptance of new products, which may limit growth and adversely affect financial results [162]. - Allegations regarding product safety and effectiveness could impair acceptance and sales of the company's healthcare products [161]. - The company may incur significant expenses to generate clinical data to demonstrate the safety, efficacy, and cost-effectiveness of its products for favorable reimbursement policies [172]. - The company faces risks from counterfeit sensors and third-party reprocessed sensors, which may harm its reputation and reduce revenue [183]. Operational Efficiency and Workforce - The company is committed to cost reduction efforts through continuous value engineering and increasing efficiency in manufacturing capabilities [20]. - Full-time employees decreased from approximately 3,800 in December 2023 to 3,600 in December 2024, while dedicated contract personnel increased from approximately 5,200 to 5,600 in the same period [146]. - The company has agreements with major suppliers that allow for pricing adjustments and annual negotiations, ensuring flexibility in supply chain management [140]. Strategic Initiatives and Realignment - The strategic realignment initiative approved by the Board aims to streamline the healthcare segment, focusing on cost rationalization and enhancing R&D efficiencies [145]. - The company is engaged in a review of alternatives for its consumer audio and healthcare businesses, with financial and legal advisors appointed for the process [149]. - The company initiated litigation against RTW Investment and others, alleging manipulation of stock voting power, with defendants holding up to 19% of the company's common stock [150].

Fourth Quarter and Full Year 2024 Earnings February 25, 2025 Forward-Looking Non-GAAP Financial Measures: This presentation also includes certain forward-looking non-GAAP financial measures. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For instance, we exclude the impact of certain charges related to acquisitions, integrations, divestitures and related costs; business transition and related c ...

Revenue Projections - Consolidated revenue for full-year 2024 is expected to be approximately $2,094 million, representing 2% growth on a reported basis and 3% growth on a constant currency basis[7]. - Healthcare revenue for full-year 2024 is expected to be approximately $1,395 million, representing 9% growth on a reported basis and 10% growth on a constant currency basis[7]. - Non-healthcare revenue for full-year 2024 is expected to be approximately $699 million, representing a 10% decline on a reported basis and a 9% decline on a constant currency basis[7]. - Full-year 2025 guidance for healthcare revenue is projected to be between $1,500 million and $1,530 million, representing 8% to 11% growth on a constant currency basis[7]. - Full-Year 2025 GAAP healthcare revenue guidance is projected between $1,500 million and $1,530 million, indicating a growth of 8% to 10% compared to $1,395 million in 2024[34]. Earnings and Profitability - Non-GAAP earnings per diluted share for full-year 2024 is expected to be more than $4.10, which represents the high end of the prior guidance range[7]. - Non-GAAP operating profit for full-year 2025 is expected to be between $398 million and $406 million, representing non-GAAP operating margins of at least 26.5%[7]. Quarterly Financial Results - GAAP consolidated revenue for the three months ended December 28, 2024, was $601 million, representing a 9% increase from $549 million in the same period of 2023[29]. - GAAP healthcare revenue for the twelve months ended December 28, 2024, was $1,395 million, showing a 9% growth from $1,275 million in 2023[30]. - GAAP non-healthcare revenue for the three months ended December 28, 2024, was $232 million, reflecting an 11% growth compared to $209 million in the same period of 2023[27]. - Non-GAAP consolidated constant currency revenue for the twelve months ended December 28, 2024, was $2,102 million, a 3% increase from $2,048 million in 2023[33]. - Non-GAAP non-healthcare constant currency revenue for the twelve months ended December 28, 2024, was $702 million, reflecting a decline of 9% from $773 million in 2023[31]. - Non-GAAP healthcare constant currency revenue for the twelve months ended December 28, 2024, was $1,400 million, indicating a 10% growth compared to $1,275 million in 2023[30]. Business Developments - The company is in the process of separating the Sound United business, which will not be included in future non-GAAP financial measures[5]. - The financial impact of one additional calendar week for the healthcare business is incorporated into the full-year 2025 guidance[5]. - Shipments of noninvasive technology boards and instruments for fourth quarter 2024 are expected to be approximately 65 thousand[7]. - The complete fourth quarter and full-year 2024 financial results will be announced on February 25, 2025[1]. Innovation and Market Strategy - The company’s innovative technologies, such as Masimo SET and rainbow Pulse CO-Oximetry, are utilized in over 200 million patients globally, enhancing patient outcomes and reducing care costs[35]. - The company continues to expand its product offerings, including the Masimo W1 Medical Watch and various portable monitoring devices, to enhance non-invasive monitoring capabilities[35]. - The company’s revenue growth strategies include focusing on healthcare technology advancements and market expansion efforts in both hospital and home settings[35].

Core Viewpoint - Analysts project that Masimo (MASI) will report quarterly earnings of $1.49 per share, reflecting a year-over-year increase of 19.2%, with revenues expected to reach $596.07 million, an 8.6% increase from the same quarter last year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts' reassessment of their initial projections [1] - Revenue from non-healthcare is estimated at $224.29 million, showing a year-over-year change of +7.3% [4] - Revenue from healthcare is projected at $369.46 million, indicating an increase of +8.7% from the prior-year quarter [4] Group 2: Profit Estimates - Gross profit from non-healthcare is forecasted to reach $77.12 million, compared to $65.80 million reported in the same quarter last year [4] - Gross profit from healthcare is estimated at $236.40 million, up from $207.70 million reported in the same quarter last year [5] Group 3: Stock Performance - Masimo shares have increased by +3.6% in the past month, outperforming the +2.6% move of the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 2 (Buy), suggesting it is expected to outperform the overall market in the near future [6]

Core Viewpoint - Masimo (MASI) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations in previous quarters [1]. Earnings Performance - Masimo has a solid track record of surpassing earnings estimates, with an average surprise of 14.18% over the last two quarters [2]. - In the last reported quarter, Masimo achieved earnings of $0.98 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, resulting in a surprise of 16.67% [3]. - For the previous quarter, the company was expected to report earnings of $0.77 per share but delivered $0.86 per share, yielding a surprise of 11.69% [3]. Earnings Estimates and Predictions - Recent estimates for Masimo have been trending upward, indicating positive sentiment among analysts [4]. - The Zacks Earnings ESP for Masimo is currently positive at +4.05%, suggesting bullish expectations for near-term earnings [7]. - The combination of a positive Earnings ESP and a Zacks Rank of 1 (Strong Buy) indicates a high likelihood of another earnings beat [7]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [5]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]. Upcoming Events - Masimo's next earnings report is anticipated to be released on February 25, 2025 [7].

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Masimo (MASI) currently holding a Momentum Style Score of A [2] Group 2: Masimo's Performance Metrics - Masimo has a Zacks Rank of 2 (Buy), indicating strong potential for outperformance, especially for stocks rated 1 (Strong Buy) and 2 (Buy) with Style Scores of A or B [3] - Over the past week, MASI shares increased by 3.53%, outperforming the Zacks Medical - Instruments industry, which rose by 1.15% [5] - In the last quarter, MASI shares rose by 24.83%, and over the past year, they gained 40.86%, while the S&P 500 increased by only 3.62% and 26.55%, respectively [6] Group 3: Trading Volume and Earnings Outlook - The average 20-day trading volume for MASI is 391,651 shares, which serves as a bullish indicator when combined with rising stock prices [7] - In the past two months, two earnings estimates for MASI have increased, raising the consensus estimate from $4.00 to $4.04, with no downward revisions noted [9] Group 4: Conclusion - Given the strong performance metrics and positive earnings outlook, MASI is positioned as a 2 (Buy) stock with a Momentum Score of A, making it a compelling investment option [11]

Masimo Corporation (MASI) Preliminary Results and Guidance - Masimo announced preliminary revenues for Q4 2024 and full-year 2024, with shares gaining nearly 0.1% following the announcement [1] - Q4 2024 total revenues are estimated at $601 million, up 9% YoY on both reported and constant exchange rate (CER) basis, exceeding the Zacks Consensus Estimate of $594.6 million [2] - Healthcare revenues for Q4 2024 are estimated at $368 million (up 8% YoY reported, 9% CER), while Non-healthcare revenues are estimated at $232 million (up 11% YoY reported and CER) [2] - Full-year 2024 total revenues are estimated at $2,094 million, up 2% YoY reported and 3% CER, in line with the Zacks Consensus Estimate of $2.09 billion [4] - Healthcare revenues for 2024 are estimated at $1,395 million (up 9% YoY reported, 10% CER), while Non-healthcare revenues are estimated at $699 million (down 10% YoY reported, 9% CER) [5] - Adjusted EPS for 2024 is expected to exceed $4.10, surpassing the Zacks Consensus Estimate of $4.04 [5] Masimo's 2025 Guidance - Healthcare revenues for 2025 are estimated between $1,500 million and $1,530 million, representing 8% growth YoY reported and 11% CER [7] - Adjusted EPS for 2025 is expected to be in the range of $4.90-$5.10, above the Zacks Consensus Estimate of $4.49 [7] Business Segment Performance and Outlook - Non-healthcare revenues improved in Q4 2024, driven by a rebound in luxury consumer purchases and the housing market [8] - Masimo's core healthcare segment drove performance in Q3 2024, with robust growth in Healthcare revenues continuing into Q4 2024 [9] - Management is focusing on long-term growth by reallocating resources to fewer projects, concentrating on sizable market opportunities, and reducing spending in non-strategic areas [10] Stock Performance and Industry Comparison - Masimo's shares gained 28.4% between Sept 29 and Dec 28, 2024, outperforming the industry's 3.9% decline and the S&P 500's 4.8% gain [12] - Masimo currently carries a Zacks Rank 2 (Buy) [13] Other Top-Ranked Medical Stocks - Cardinal Health (CAH) has a Zacks Rank 2, with an estimated long-term growth rate of 10.5% and shares gaining 8.5% compared to the industry's 1.2% growth [14] - Cencora (COR) has a Zacks Rank 2, with an estimated long-term growth rate of 10.4% and shares gaining 0.9% against the industry's 14.4% decline [15] - DaVita (DVA) has a Zacks Rank 1, with an estimated long-term growth rate of 18.3% and shares losing 5.4% compared to the industry's 8.2% decline [17]

Price Target Changes - Goldman Sachs cut the price target for Bright Horizons Family Solutions Inc. (BFAM) from $162 to $142 while maintaining a Buy rating. The shares closed at $110.83 [1] - Rodman & Renshaw raised the price target for Viracta Therapeutics, Inc. (VIRX) from $3.5 to $0.25 but downgraded the stock from Buy to Neutral. The shares closed at $0.2370 [1] - Raymond James raised the price target for Masimo Corporation (MASI) from $170 to $194 while maintaining an Outperform rating. The shares closed at $171.02 [1] - Goldman Sachs slashed the price target for KinderCare Learning Companies, Inc. (KLC) from $41 to $35 while maintaining a Buy rating. The shares closed at $17.88 [1] - B of A Securities boosted the price target for MakeMyTrip Limited (MMYT) from $119 to $130 while maintaining a Buy rating. The shares settled at $116.21 [1]

Core Insights - The Medical Instruments industry is experiencing rapid advancements due to AI and predictive analytics, enhancing diagnostics, patient monitoring, and personalized treatment [1][2] - The adoption of generative AI (genAI) and digital therapeutics is expected to significantly impact the healthcare industry by 2025, improving early disease detection and operational efficiency [2][5] - Despite challenges such as geopolitical tensions and supply chain issues, companies like Masimo Corporation, Penumbra, and Veracyte are adapting well and seeing stock price increases [3] Industry Overview - The Zacks Medical - Instruments industry is fragmented, focusing on R&D across various therapeutic areas and utilizing AI for quick and accurate disease diagnosis and treatment [4] - Key trends include the rise of telemedicine, robotic-assisted surgeries, and advancements in 3D printing and nanomedicine [4] Trends Shaping the Industry - The genAI market in healthcare was valued at $1.8 billion in 2023 and is projected to grow at a CAGR of 33.2% from 2024 to 2032, driven by increasing demand for personalized treatment and advancements in AI technologies [5] - The diagnostics market is also expected to grow at a CAGR of 24.6% by 2034, indicating a significant shift towards AI applications in this area [5] M&A Activity - The industry is witnessing a robust M&A trend, with 168 deals worth $14.4 billion announced in Q3 2024, marking a 247% increase in value compared to the previous year [6] - Notable transactions include Johnson & Johnson's $13.1 billion acquisition of Shockwave Medical and Becton, Dickinson and Company's $4.2 billion purchase of Edwards Lifesciences' Critical Care division [6] Economic Context - The IMF projects real GDP growth of 3.2% for 2024 and 2025, with a decline in inflation expected by 2025 [7][8] - Despite these projections, risks remain due to geopolitical conflicts and potential financial market volatility [8] Industry Performance - The Zacks Medical Instruments industry has underperformed the S&P 500 but outperformed the broader sector, rising 7.7% over the past year [11] - The industry currently trades at a forward P/E of 32.16X, higher than the broader industry average of 20.63X and the S&P 500's 22.66X [13] Company Highlights - **Veracyte**: Expected 2024 sales of $443.9 million, a 22.9% increase from 2023, with a projected EPS of 38 cents, up 137.3% [17] - **Masimo**: Anticipated 2024 sales of $2.09 billion, a 1.9% rise, with an EPS estimate of $4.03, reflecting a 6.3% increase [20] - **Penumbra**: Projected 2024 sales of $1.19 billion, a 12.5% increase, with an EPS estimate of $2.81, up 34.5% from the previous year [24]

Masimo Corporation (MASI) delivered adjusted earnings per share (EPS) of 98 cents in the third quarter of 2024, up 30.7% year over year. The figure beat the Zacks Consensus Estimate by 16.7%.The adjustments include acquired intangible asset amortization, and acquisitions, integrations, divestitures, and related costs, among others.GAAP EPS for the quarter was 18 cents, down 10% year over year.MASI’s Revenues in DetailMasimo registered revenues of $504.6 million in the third quarter, up 5.4% year over year o ...