In This Article:
Masimo Corporation’s (NASDAQ:MASI) most recent earnings update in December 2017 confirmed that the business endured a immense headwind with earnings falling by -56.23%. Investors may find it useful to understand how market analysts predict Masimo’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. View our latest analysis for Masimo
Analysts’ outlook for next year seems positive, with earnings increasing by a robust 22.51%. This growth seems to continue into the following year with rates reaching double digit 29.92% compared to today’s earnings, and finally hitting US$198.25M by 2021.
Even though it’s helpful to be aware of the growth year by year relative to today’s value, it may be more beneficial gauging the rate at which the earnings are growing on average every year. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Masimo’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12.21%. This means, we can presume Masimo will grow its earnings by 12.21% every year for the next few years.
Next Steps:
For Masimo, I’ve compiled three fundamental aspects you should look at:
-
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
-
Valuation: What is MASI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MASI is currently mispriced by the market.
-
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MASI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.