The 10-second takeaway
For the quarter ended Sep. 29 (Q3), Masimo missed slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share didn't change.
Gross margins were steady, operating margins contracted, net margins dropped.
Masimo reported revenue of $119.1 million. The 10 analysts polled by S&P Capital IQ looked for a top line of $121.0 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $104.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.24. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.26 per share. GAAP EPS of $0.24 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 65.8%, about the same as the prior-year quarter. Operating margin was 15.1%, 310 basis points worse than the prior-year quarter. Net margin was 11.6%, 270 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $129.8 million. On the bottom line, the average EPS estimate is $0.29.
Next year's average estimate for revenue is $492.8 million. The average EPS estimate is $1.11.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 170 members out of 178 rating the stock outperform, and eight members rating it underperform. Among 35 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give Masimo a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Masimo is hold, with an average price target of $25.94.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Masimo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.