Masimo board member William Jellison resigns effective Monday

Masimo Corporation reported Q2 2025 sales of $370.9 million, surpassing analyst expectations, though constant currency revenue growth decelerated to 7% from 10% in Q1. The company also received FDA 510(k) clearance for expanded O3 Regional Oximetry indications. This news coincides with Apple reintroducing its Blood Oxygen feature on Apple Watch models, a key development given Masimo's prior patent infringement lawsuit against Apple. Analyst ratings reflect mixed sentiment, with Stifel and BTIG reiterating Buy ratings, while Needham maintains a Hold.

Analysis

Masimo Corporation (MASI) reported a complex second quarter for 2025, delivering sales of $370.9 million that surpassed both consensus and Stifel's expectations. However, this top-line beat is tempered by a notable deceleration in constant currency revenue growth to 7%, a decline from the 10% rate posted in the first quarter. On the product front, the company secured a positive regulatory milestone with FDA 510(k) clearance for expanded indications of its O3 Regional Oximetry, widening its addressable market. A critical development in the competitive landscape is Apple's reintroduction of its Blood Oxygen feature, reigniting competitive pressure following the patent infringement dispute. This development coincides with the resignation of board member William Jellison, which the company stated was not due to any operational disagreements. Analyst sentiment is divergent; while Stifel and BTIG reiterated Buy ratings with price targets of $180.00 and $198.00 respectively, Needham maintained a more cautious Hold rating, reflecting the balance between the earnings beat and the combination of slowing growth and renewed competitive threats.

Key Decisions for Investors

• Investors should closely monitor future revenue growth rates, as the deceleration from 10% in Q1 to 7% in Q2, despite an earnings beat, could signal a challenging forward-looking trend.
• The reintroduction of Apple's Blood Oxygen feature is a material risk factor; its market impact on Masimo's sales and potential future royalty streams must be assessed when evaluating the stock's long-term value.
• Given the split analyst ratings, with two Buys and a Hold, it is prudent to weigh the bullish case based on FDA approvals and market-beating sales against the bearish case of slowing growth and heightened competition from a major tech player.