Masimo (MASI) Stock Forecast & Price Target

Masimo Corporation has demonstrated strong demand with its backlog metric, "unrecognized contract revenue," increasing by 7% year-over-year to $1.7 billion in the second quarter, reflecting robust future revenue growth prospects. The company’s management has reaffirmed a full-year constant currency revenue growth range of 8-11%, indicating that sustained solid growth is anticipated in the second half of the year. Additionally, Masimo achieved an earnings per share (EPS) of $1.33, surpassing expectations and benefiting from improved margins and a lower effective tax rate, further highlighting the company's financial strength.

Masimo Corp has shown a year-over-year decline in incremental new contracts, dropping from $134 million in 2Q-24 to $80 million in 2Q-25, which raises concerns about future revenue growth despite the explanation of quarter-to-quarter fluctuations. The company's updated full-year 2025 guidance indicates slightly lower revenue expectations sequentially, along with anticipated tariff impacts that have changed from $33M-$37M to $17M-$19M, highlighting uncertainty in cost management. Additionally, while gross margin improved by 40 basis points year-over-year to 62.9%, there are signs of vulnerability in capital sales, countered only by strong consumables growth, suggesting potential challenges in sustaining overall financial performance.