Shareholders might have noticed that Masimo Corporation (NASDAQ:MASI) filed its quarterly result this time last week. The early response was not positive, with shares down 8.9% to US$124 in the past week. Masimo reported US$493m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.35 beat expectations, being 2.5% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the current consensus from Masimo's nine analysts is for revenues of US$2.10b in 2024. This would reflect an okay 6.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 31% to US$1.95. Before this earnings report, the analysts had been forecasting revenues of US$2.10b and earnings per share (EPS) of US$2.00 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$152, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Masimo analyst has a price target of US$170 per share, while the most pessimistic values it at US$125. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Masimo's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.3% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% annually. Factoring in the forecast slowdown in growth, it looks like Masimo is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Masimo. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$152, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Masimo. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Masimo going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Masimo that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.