MASI Stock Crashes on Miss Sellout; Why it could take ‘months to regain its footing’

It could take a medical device manufacturer Masimo (MASI) month to regain its footing, an analyst said on Tuesday as investors hammered MASI stock on a massive selling failure.


For the June quarter, Masimo pre-announced revenue of $453 million to $457 million. That’s well below the $503 million forecast, according to FactSet. Masimo also cut its sales outlook for the year.

In response, MASI stock fell 21.9% near 115. In previous trading in today’s stock market, the medical stock hit its lowest point in four years. The decline was even more pronounced in premarket stocks.

Masimo’s story is “messy,” BTIG analyst Marie Thibault said in a note to clients. It “can take months to get back on your feet,” she added.

“There are a few positives though,” she said. She noted the “careful and cautious reduction in advice” and the possibility that some of Masimo’s problems are transitory. It retained its buy rating on MASI shares, but reduced its price target to 153 from 200.

MASI stock: delays, inventory issues

The sales shortfall occurred in both of Masimo’s businesses. The company forecasts healthcare sales between $280 million and $282 million. He expects non-healthcare efforts to drive sales of $173 million to $175 million.

Hospitals often deploy Masimo technology. It sells non-invasive remote monitoring tools. But the June quarter was characterized by low hospitalizations in the United States, an unusually early and mild flu season and delays in large orders. Some customers also relied on existing inventory instead of placing new orders. Outside of healthcare, Masimo called for a slowdown in high-end audio equipment.

“We believe that while Masimo’s healthcare challenges are mostly transitory, we believe its non-healthcare challenges are longer term,” Needham analyst Mike Matson said in his statement. note to customers. He cut his price target on MASI shares to 136 from 207, but kept his buy rating.

Meanwhile, BTIG’s Thibault says the issues appear to be specific to Masimo and should not indicate general problems for the medical device segment.

Still being evaluated, according to the company

Masimo cut the low of its healthcare sales outlook to $1.3 billion from $1.45 billion.

“We still assess the upper end of the revenue guidance for the healthcare sector, but it could be materially higher than the lower end of our range as we still target our original guidance,” Masimo said in his statement. Press release.

The company also expects its non-medical business to bring in between $800 million and $850 million in sales. At the midpoint, that’s $155 million less than the company’s previous outlook for MASI stock.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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