Masimo (MASI) Stock Forecast & Price Target

Masimo Corp demonstrated robust demand and future revenue growth potential, with its backlog metric of unrecognized contract revenue increasing by 7% year-over-year to $1.7 billion in the second quarter, indicating strong market interest. Management's reaffirmation of a full-year constant currency revenue growth range of 8-11% suggests that robust growth momentum is expected to continue into the second half of the year. Additionally, the company achieved an earnings per share (EPS) of $1.33, surpassing analyst expectations significantly, driven by margin improvements and a favorable effective tax rate.

Masimo Corp has experienced a year-over-year decline in incremental new contracts, decreasing from $134 million in Q2-24 to $80 million in Q2-25, which has raised concerns among investors despite management's emphasis on the lumpiness of contract timings. Additionally, the company has revised its revenue expectations downward for the remainder of 2025, primarily due to ongoing tariff impacts, which are now estimated to be between $17 million and $19 million, a reduction from previous guidance. Furthermore, despite positive indicators such as gross margin improvement and strong consumables growth, the anticipated lower capital sales growth and the uncertain implications of tariff exposure present potential risks to Masimo's financial stability moving forward.