Masimo Corp

MASI

Electromedical & Electrotherapeutic Apparatus

Mkt Cap

$6.741B

PE

85.22

Debt

$910.6M

Cash

$164M

EV

$7.487B

FCF

$95.8M

Market Cap

$6.741B

P/E Ratio

85.22

Debt

$910.6M

Cash

$164M

EV

$7.487B

FCF

$95.8M

Charts data: {"Earnings":[{"time":"2015-01-02","value":72518000},{"time":"2016-01-01","value":81500000},{"time":"2016-12-30","value":300666000},{"time":"2017-12-29","value":131616000},{"time":"2018-12-28","value":193543000},{"time":"2019-12-27","value":196216000},{"time":"2021-01-01","value":240282000},{"time":"2021-12-31","value":229600000},{"time":"2022-12-30","value":143500000},{"time":"2023-12-29","value":81500000}],"Sales":[{"time":"2015-01-02","value":586643000},{"time":"2016-01-01","value":630111000},{"time":"2016-12-30","value":694625000},{"time":"2017-12-29","value":798108000},{"time":"2018-12-28","value":858289000},{"time":"2019-12-27","value":937837000},{"time":"2021-01-01","value":1143744000},{"time":"2021-12-31","value":1239153000},{"time":"2022-12-30","value":2035800000},{"time":"2023-12-29","value":2048100000}],"Net Margins":[{"time":"2015-01-02","value":0.12361521402283843},{"time":"2016-01-01","value":0.1293422904853272},{"time":"2016-12-30","value":0.4328464999100234},{"time":"2017-12-29","value":0.16491001217880286},{"time":"2018-12-28","value":0.22549863740534948},{"time":"2019-12-27","value":0.20922185838264004},{"time":"2021-01-01","value":0.2100837250293772},{"time":"2021-12-31","value":0.18528785388083635},{"time":"2022-12-30","value":0.07048826014343255},{"time":"2023-12-29","value":0.039792978858454175}],"Assets":[{"time":"2015-01-02","value":565006000},{"time":"2016-01-01","value":601735000},{"time":"2016-12-30","value":820525000},{"time":"2017-12-29","value":910235000},{"time":"2018-12-28","value":1154818000},{"time":"2019-12-27","value":1396128000},{"time":"2021-01-01","value":1712552000},{"time":"2021-12-31","value":1887010000},{"time":"2022-12-30","value":3210600000},{"time":"2023-12-29","value":3041500000}],"Stockholders Equity":[{"time":"2015-01-02","value":307741000},{"time":"2016-01-01","value":275712000},{"time":"2016-12-30","value":560236000},{"time":"2017-12-29","value":706911000},{"time":"2018-12-28","value":969065000},{"time":"2019-12-27","value":1167874000},{"time":"2021-01-01","value":1407660000},{"time":"2021-12-31","value":1550245000},{"time":"2022-12-30","value":1338900000},{"time":"2023-12-29","value":1364800000}],"ROE":[{"time":"2015-01-02","value":0.23564620898742775},{"time":"2016-01-01","value":0.2955983054781801},{"time":"2016-12-30","value":0.5366774002384709},{"time":"2017-12-29","value":0.18618468237161395},{"time":"2018-12-28","value":0.19972138091872063},{"time":"2019-12-27","value":0.16801127518893305},{"time":"2021-01-01","value":0.17069604876177485},{"time":"2021-12-31","value":0.1481056220145848},{"time":"2022-12-30","value":0.10717753379640003},{"time":"2023-12-29","value":0.059715709261430244}],"ROA":[{"time":"2015-01-02","value":0.1832069039974797},{"time":"2016-01-01","value":0.19983879947152816},{"time":"2016-12-30","value":0.5138673410316565},{"time":"2017-12-29","value":0.21978060610721406},{"time":"2018-12-28","value":0.18572796752388687},{"time":"2019-12-27","value":0.16796024433289786},{"time":"2021-01-01","value":0.15419911336998818},{"time":"2021-12-31","value":0.14616880673658328},{"time":"2022-12-30","value":0.06540833489067464},{"time":"2023-12-29","value":0.04487917146144994}]}

Masimo Corporation develops, manufactures, and markets various patient monitoring technologies, and automation and connectivity solutions worldwide. The company offers masimo signal extraction technology (SET) pulse oximetry with measure-through motion and low perfusion pulse oximetry monitoring to address the primary limitations of conventional pulse oximetry; Masimo rainbow SET platform, including rainbow SET Pulse CO-Oximetry products that allows noninvasive monitoring of carboxyhemoglobin, methemoglobin, hemoglobin concentration, fractional arterial oxygen saturation, oxygen content, pleth variability index, rainbow pleth variability index, respiration rate from the pleth, and oxygen reserve index, as well as acoustic respiration monitoring, SedLine brain function monitoring, NomoLine capnography and gas monitoring, and O3 regional oximetry. It also provides brain function and hemodynamic monitoring solutions; patient position and activity tracking, and neuromodulation technology solutions; and Masimo Hospital Automation platform, including hospital automation solutions, including Patient SafetyNet, Patient SafetyNet Surveillance, SafetyNet, SafetyNet-Open, Replica, Iris, MyView, UniView, Uniview: 60, Trace, Masimo Sleep, Centroid, and Bridg; and nasal high-flow ventilation, neuromodulation therapeutics, and telehealth solutions. It provides its products through direct sales force, distributors, and original equipment manufacturers partners to hospitals, emergency medical service and home care providers, long-term care facilities, physician offices, veterinarians, and consumers; and home wellness products through e-commerce internet sites, such as masimopersonalhealth.com, amazon.com, and shopify.com. Masimo Corporation was incorporated in 1989 and is headquartered in Irvine, California.

Sector

10-Q
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10-Q
9/29/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/30/17

DCF

Discounted Cash Flow Valuation of Masimo Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$95.8M	$99.88M	$104.1M	$108.6M	$113.2M	$118M	$123.1M	$128.3M	$133.8M	$139.5M	$145.4M	$1.454B
DCF		$86.85M	$78.74M	$71.39M	$64.72M	$58.68M	$53.2M	$48.23M	$43.73M	$39.64M	$35.94M	$359.4M
Value	$940.5M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 0.73%

Earnings Stability 0.18%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	01-2016	12-2016	12-2017	12-2018	12-2019	01-2021	12-2021	12-2022	12-2023	TTM
Net Margin	13%	43%	16%	23%	21%	21%	19%	7%	4%	4%
ROA	20%	51%	22%	19%	17%	15%	15%	6.5%	4.5%	4.5%
ROE	30%	54%	19%	20%	17%	17%	15%	11%	6%	5.8%

What is the average Net Margin?

The average Net Margin over the past 5 years is +15.67%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -3.91%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +12.74%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -2.91%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +14.22%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -2.59%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	01-2016	12-2016	12-2017	12-2018	12-2019	01-2021	12-2021	12-2022	12-2023	TTM
Debt FCF	2.90	0.00	-	-	-	-	0.00	-41.53	18.77	9.51
Debt Equity	0.67	0.00	-	-	-	-	0.00	0.73	0.69	0.67
MIN
Graham Stability	-	-	87%	100%	94%	100%	100%	65%	40%	40%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 9.51.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 9.38.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.40.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	01-2021	12-2022	Trend
Revenue	17%	19%	21%	0.6%	2.3%
Net Income	-17%	-16%	-30%	-43%	-18%
Stockholders Equity	14%	7.1%	-1%	1.9%	-5.8%
FCF	-26%	-26%	-29%	-	-51%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +19%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.27%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -15.88%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -17.71%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +7.09%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -5.83%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -25.78%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -50.65%.