Masimo Corporation Common Stock (MASI)

FairStock Score: 45/100 — MIXED

Key Financials

Strengths

• Generates $316 million in annual free cash flow (3.4% yield on market cap)
• High return on equity of 23.4% demonstrating efficient capital deployment
• Altman Z-Score of 7.6 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($35) with negative 416% margin of safety—limited downside protection
• Revenue declining at 31.3% year-over-year signals potential demand weakness or market share loss
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Masimo Corporation Common Stock is a small-cap healthcare company valued at $9.3 billion. The business generates $1.5 billion in annual revenue with a 4.5% net margin and $316 million in free cash flow. From a quality standpoint, Masimo shows Altman Z-Score of 7.6 confirms fortress-level solvency and strong 23% ROE. On valuation, the stock is commanding a steep 46.5x multiple, with trades far above its Graham Number ($35) with no margin of safety. Growth dynamics show revenue growing at -31.3% and profit growth of 119.5%. Our composite FairStock Score of 45/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $316 million in annual free cash flow (3.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 47x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer