Masimo Corp MASI

Motley Fool

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The company's preliminary second-quarter numbers have investors worried.

What happened

Shares of Masimo (MASI -4.63%) were down by 18.5% as of 1:30 p.m. on Tuesday. The patient monitoring company announced preliminary numbers for the second quarter after the markets closed on Monday. The stock is now down by about 19% so far this year.

 

NASDAQ: MASI

Masimo

Today's Change

(-4.63%) -US$5.45

Current Price

US$112.28

 

 

 

MASI

Key Data Points

Market Cap

$6B

Day's Range

US$111.62 - US$118.15

52wk Range

US$105.50 - US$198.00

Volume

40

Avg Vol

620,410

Gross Margin

57.27%

Dividend Yield

N/A

So what

Masimo is a healthcare company that focuses on patient monitoring technologies, including measurements, sensors, patient monitors, and automation and connectivity solutions.

Its preliminary second-quarter revenue numbers came in lower than expected, leading management to say it plans to find ways to cut costs for the rest of the year. 

Masimo said it expects second-quarter revenue to be between $453 million and $457 million, mainly because healthcare revenue was expected to be between $280 million and $282 million. The company said many of its customers are delaying large orders due to lower occupancy rates at hospitals. Management also said that rising costs at hospitals have led to slackening demand for capital equipment, such as that made by Masimo.

Now what

Anticipating those lower-than-expected numbers, the company said it plans to detail its cost-cutting plan when it announces its official second-quarter results on Aug. 8. The company, which booked revenues of $2.04 billion in 2022, said it also expects to lower its 2023 revenue guidance to between $1.3 billion and $1.45 billion. The company also said it is lowering its revenue guidance range for its non-healthcare business to $800 million to $850 million, down from its earlier range of $965 million to $995 million.

All this bad news led several analysts to lower their ratings on the stock. Stifel analyst Rick Wise downgraded the stock from buy to hold and cut his share price target on it from $205 to $120. Needham analyst Mike Matson kept his buy rating on the stock but cut his price target from $207 to $136. Vik Chopra, an analyst for Wells Fargo, kept his hold rating on the stock but cut his price target from $173 to $126.