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what it is
Masimo makes patient-monitoring devices that help hospitals track oxygen, breathing, and other vital signs without invasive tools.
how it gets paid
Last year Masimo made about $1.52B in revenue. hospital monitoring systems was the main engine at $0.64B, or ~42% of sales.
why it's growing
Revenue grew 9.4% last year. The 62.6% gross margin matters most because it shows the core business still has pricing power even while headline EPS has been messy.
what just happened
Masimo's last reported quarter beat EPS estimates by 8.26%, but the bigger story was still revenue volatility.
At a glance
B+ balance sheet — decent shape, but not bulletproof
15/100 earnings predictability — expect surprises
35.0x trailing p/e — you're paying up for this one
21.0% return on capital — every dollar works hard here
xvary composite: 46/100 — below average
What they do
Masimo makes patient-monitoring devices that help hospitals track oxygen, breathing, and other vital signs without invasive tools.
Masimo wins where failure is expensive. If your monitor is wrong in an ICU, you do not get a second chance. That is why record hospital contracting helped drive 2025 revenue to $1.52 billion, up 9% from continuing operations. Masimo SET is its core platform, which means proprietary signal processing tech (better readings through motion and low blood flow) → more reliable numbers → hospitals are slower to switch.
How they make money
~$1.52B
annual revenue · their business grew ~+9% last year (continuing ops)
hospital monitoring systems
$0.64B
sensors and consumables
$0.46B
rainbow and advanced parameters
$0.20B
oem and partner revenue
$0.15B
other healthcare products
$0.07B
The products that matter
monitors oxygen and patient status
Noninvasive Patient Monitoring
~$1.52B revenue
it drives essentially the entire ~$1.52B revenue base shown on this snapshot. That's focus when execution works and concentration when it doesn't.
core franchise
expands sensor reach through partners
Royal Philips Integration
~$500M unrecognized contract revenue
management says this relationship has helped materialize about $500M in unrecognized contract revenue. In human-speak: the pipeline exists, but you still need to see it turn into reported revenue.
pipeline signal
hospital sales and contracting engine
Hospital Contracting
record year
management described 2025 as a record year for hospital contracting, but this page does not give you the exact win count. That means you have the signal without the full proof. Useful, but incomplete.
demand check
Key numbers
$1.52B
annual revenue
That is the current sales base, and it grew 9% in 2025 from continuing operations. You are not buying a startup story here.
23.0%
operating margin
Operating margin means profit after running the business. Plain English: Masimo keeps 23 cents from every sales dollar before interest and taxes, which is rich for device hardware.
21.0%
return on capital
Return on capital means how efficiently management turns invested money into operating profit. Plain English: this business still earns solid returns on what it puts to work.
$500M
contract pipeline
Management says partnership activity helped create about $500 million in unrecognized contract revenue. Plain English: a third of annual sales is waiting to be converted.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- long-term debt $559M (7% of capital)
- net profit margin 23.0% — keeps 23 cents of every dollar in revenue
- return on equity 23% — $0.23 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in MASI 3 years ago → it's now worth $8,250.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Masimo's last reported quarter beat EPS estimates by 8.26%, but the bigger story was still revenue volatility.
Consensus showed EPS of $1.31 versus a ~$1.21 estimate. Latest-quarter revenue near $1.1B is plausible vs a ~$1.52B annual base; ignore “+200% vs. prior year” tags here—they do not line up with ~9% FY growth from continuing operations.
$1.1B
revenue
$1.31
eps
62.6%
gross margin
the number that mattered
The 62.6% gross margin matters most because it shows the core business still has pricing power even while headline EPS has been messy.
-
for the full year, masimo reported preliminary revenues of $1.52 billion, reflecting 9% growth from continuing operations, while successfully expanding operating margins by hundreds of basis points.
-
this was driven by a record year for hospital contracting, with masimo securing an all-time high in incremental contract value from new and existing customers.
-
management aims to extend the company’s market leading position in 2026.with the distractions of the 20242025 proxy battle largely in the rearview mirror, masimo is leveraging its expanded partnership with royal phillips to embed its sensors into a wider array of original equipment manufacturer (oem) devices, setting up 2026 to be the first full year of optimized pure-play healthcare performance.
-
this partnership has helped materialize approximately $500 million in unrecognized contract revenue expected to be realized within the next 12 months, marking a 17% jump over last year.
-
masimo has set ambitious long-range targets through 2028.
source: company earnings report, 2026
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What could go wrong
the main risk is simple: masimo needs hospitals to keep trusting the technology, signing contracts, and converting those contracts into revenue while margins stay intact. Right now, each part of that chain matters.
med
clinical credibility gets challenged
if regulators or new studies raise questions about sensor accuracy or clinical usefulness, hospitals can slow purchasing fast. This is the core franchise, not a side project.
with roughly $1.5B of annual revenue tied to patient monitoring, pressure on adoption hits the whole story at once.
med
hospital momentum fails to convert
management is pointing to a record year for hospital contracting and about $500M in unrecognized contract revenue. If conversion drags, the pipeline story stays a story.
the stock is already leaning on a path toward $2B revenue. Miss that path and 35.0x trailing earnings looks less patient.
med
pricing pressure shows up in the margin line
22.0% operating margin is healthy. It is also the easiest place to spot trouble if hospitals push back or larger medtech rivals compete harder.
if margins soften, you feel it twice — in lower earnings power and in a weaker argument for paying a premium multiple.
these risks point to the same conclusion: a concentrated $1.5B revenue base trading at 35.0x trailing earnings with only 15 / 100 earnings predictability leaves less room for mistakes than the business quality suggests.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings report
after a -$1.84 EPS quarter, you need to see whether profitability normalizes or whether the one-bad-quarter story starts looking generous.
trend
revenue growth quality
watch whether growth looks more like the preliminary +9% company update or the older +37% dataset figure. Same company. Different mood.
risk
hospital contract conversion
record contracting is nice. Reported revenue is nicer. Keep an eye on whether hospital wins and the Philips-linked pipeline turn into actual sales.
metric
22.0% operating margin
this is the cleanest single check on pricing power. If margins hold while growth improves, the setup gets more believable. If margins slip, the multiple looks generous.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this is more likely to lag than lead in the near term.
risk profile
average
stability score 3 — not especially safe, not a disaster either.
chart momentum
below average
technical score 4 — the tape is not doing the stock any favors right now.
earnings predictability
15 / 100
the earnings line is hard to model cleanly. You should expect noise.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 161 buyers vs. 184 sellers in 3q2025. total institutional holdings: 56.3M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$107
$246
$140
current price
$177
target midpoint · +26% from current · 3-5yr high: $290 (+105% · 20% ann'l return)
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