Why Masimo (MASI) is a Top Growth Stock for the Long-Term

Masimo (MASI), a developer of non-invasive monitoring systems, is positioned as a top growth stock by Zacks, holding a #1 (Strong Buy) Rank, an 'A' Growth Style Score, and a 'B' VGM Score. The company reported a 9.4% increase in its healthcare segment, which constitutes 66.6% of FY24 revenues, and is projected to achieve 20.5% year-over-year earnings growth for the current fiscal year. This outlook is reinforced by recent upward revisions in FY2025 earnings estimates by analysts, increasing the Zacks Consensus Estimate to $5.30 per share, suggesting strong potential for outperformance.

Analysis

Masimo Corporation (MASI) exhibits strong forward-looking growth indicators, according to the provided analyst report. The company holds a top-tier 'A' rating for Growth and a #1 'Strong Buy' rank, supported by a forecasted 20.5% year-over-year earnings growth for the current fiscal year. This positive outlook is further substantiated by recent analyst actions, with four upward revisions to fiscal 2025 earnings estimates over the last 60 days, elevating the consensus estimate to $5.30 per share. Operationally, the company's core Healthcare segment, which constitutes 66.6% of FY24 revenue, demonstrated solid performance with 9.4% growth from the prior year, though this was partially offset by a 9.5% decline in its smaller Non-healthcare segment. MASI also has a consistent history of outperformance, reflected in an average earnings surprise of +13.8%, suggesting a pattern of exceeding market expectations.

Key Decisions for Investors

• Investors with a growth-focused strategy should consider the 'A' growth score, 20.5% projected earnings growth, and upward analyst revisions as significant positive indicators for Masimo.
• It is prudent to monitor the divergent performance between the company's segments, specifically watching for sustained momentum in the core Healthcare business to offset the recent 9.5% decline in the Non-healthcare division.
• Given that the bullish thesis is heavily reliant on forward-looking estimates, investors should track future analyst earnings revisions and the company's ability to maintain its +13.8% average earnings surprise track record in upcoming quarters.