Masimo expands key customer base

The company's prospects are encouraging, given the sizeable global market opportunity and adoption of pulse oximetry in noncritical areas of hospitals.

By Zacks.com Oct 9, 2012 6:44PM

Image: Surgeon with paperwork (Creatas Images/JupiterImages Corporation)By Zacks Equity Research

 

Masimo (MASI), a leader in noninvasive monitoring technology for patient care, recently revealed that Hamilton Medical Center located in Dalton, Ga., had upgraded to its oximetry offerings. These offerings provide medical practitioners with continuous and non-intrusive patient monitoring capability.  

 

In the second quarter of 2012, Masimo completed the strategic acquisition of Phasein AB of Sweden. The purchase price was $30 million. Phasein is a provider of capnography technology, and had sales of about $10 million. This acquisition provides the company with another set of measurable variables. It is expected that earnings per share will be neutral in 2013 and subsequently turn accretive.

 

Masimo is a market leader in the pulse oximetry monitoring equipment industry. The company’s prospects are encouraging, given the sizeable global market opportunity, adoption of pulse oximetry in non-critical areas of hospitals and growing barriers to entry due to additional non-invasive parameters.

 

Shipments have been growing at a steady rate fueled by new contracts. However, the renewal of a royalty agreement with Covidien (COV) provides little or no benefit due to lower rates. Further, competition is intense and Masimo partly depends upon its manufacturing partners for sales. We currently have a "neutral" recommendation on Masimo. The stock currently retains a Zacks No. 2 rank, which translates into a short-term "buy" rating.

 

 

 

Tags: COV
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