Editor's note: The original version of this story used third-quarter numbers for revenue and earnings per share. Masimo beat revenue estimates in its fourth quarter, while meeting EPS expectations. The Fool regrets the error.
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Masimo beat estimates on revenue and met expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share dropped.
Margins contracted across the board.
Masimo recorded revenue of $112.3 million. The 10 analysts polled by S&P Capital IQ looked for revenue of $110.3 million on the same basis.
Non-GAAP EPS came in at $0.23. The 12 earnings estimates compiled by S&P Capital IQ anticipated $0.23 per share on the same basis.
For the quarter, gross margin was 65.5%, 470 basis points worse than the prior-year quarter. Operating margin was 17.9%, 420 basis points worse than the prior-year quarter. Net margin was 12.3%, 300 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $119 million. On the bottom line, the average EPS estimate is $0.29.
Next year's average estimate for revenue is $483 million. The average EPS estimate is $1.17.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 160 members out of 170 rating the stock outperform, and 10 members rating it underperform. Among 36 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Masimo a green thumbs-up, and one gives it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Masimo is hold, with a mean price target of $24.55.
Over the decades, small-cap stocks like Masimo have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Masimo to My Watchlist.