Masimo (MASI-Q)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

MASI is a $5.4B company, which has declined ~32% year-to-date and 31% on a one-year basis. It missed on both sales and estimates in its recent quarter, and management noted it was displeased with results. Reduced guidance was led by assumptions of impatient volumes not returning to levels that management expected and it is not receiving some of the new large orders it anticipated. It trades at a 2.5X forward sales and 27.8X forward earnings multiple, which are both below its 10-year average. Relative to some of its peers, it trades at a cheaper P/E and price-to-sales valuation, but its forward sales and growth estimates are also weak relative to peers. We are not big fans of its negative momentum and poor guidance from management - we would prefer to see a shift in momentum with sales orders before getting more comfortable with the name.
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Rallied during Covid, then plummeted post-Covid. Also, suffered from a high PE and they bought a company that they market didn't care for. Most recent quarter reported strong sales and earnings, though a weak forecast. It bottomed. Since November it has rebounded from $108 to $156. They just won a trade commission judgement against Apple.

Nearly doubled from the start of Covid to last November, but has plunged back and then some. In January, they issued lukewarm guidance, then a negative pre-announcement in late March as they deal with supply shortages. Also have announced the acquisition of a consumer electronic company that he doesn't understand why. Recently, they have reported bullish guidance and better numbers. Perhaps they have already bottomed. rebounded from lows.