NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.
Highlights from the ratings report include:
- MASI's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 9.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MASI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.97, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income increased by 19.3% when compared to the same quarter one year prior, going from $14.29 million to $17.04 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Health Care Equipment & Supplies industry and the overall market, MASIMO CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- In its most recent trading session, MASI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
Masimo Corporation, a medical technology company, develops, manufactures, and markets noninvasive patient monitoring products worldwide. The company has a P/E ratio of 20.7, above the average health services industry P/E ratio of 20.5 and above the S&P 500 P/E ratio of 17.7. Masimo has a market cap of $1.4 billion and is part of the
industry. Shares are down 20.1% year to date as of the close of trading on Thursday.
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