Is MASI a good stock to buy? We came across a bullish thesis on Masimo Corporation on Valueinvestorsclub.com by GCA. In this article, we will summarize the bulls’ thesis on MASI. Masimo Corporation’s share was trading at $178.51 as of April 28th. MASI’s trailing P/E was 46.65 according to Yahoo Finance.
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Masimo Corporation engages in the development, manufacture, and marketing of various patient monitoring technologies, and automation and connectivity solutions worldwide. MASI is a high-quality med-tech company undergoing a sharp turnaround after refocusing on its core hospital monitoring business following a misstep into consumer electronics. Known for its leadership in pulse oximetry and noninvasive patient monitoring, Masimo serves approximately 200 million patients annually and maintains a strong presence across leading U.S. hospitals.
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Its business model is anchored by a high-margin consumables engine, where single-use sensors generate recurring revenue with healthcare gross margins exceeding 60%, creating a durable and predictable earnings base. After the controversial acquisition of Sound United in 2022, which weighed on margins and valuation, activist-driven governance changes led to a strategic reset, culminating in the divestiture of the consumer segment in 2025 and a renewed focus on operational efficiency and shareholder returns.
The financial profile has improved meaningfully, with revenue from continuing operations growing 8% year over year and operating margins rebounding toward ~27%, with a clear path to 30% by 2028. Strong backlog exceeding $500 million and high single-digit growth expectations support visibility, while disciplined cost management and mix improvements drive earnings expansion. Despite these improvements, Masimo trades at a discount to historical valuation levels, reflecting residual skepticism rather than fundamentals.
Base-case estimates suggest earnings growth alone could drive ~24% upside, while modest multiple expansion alongside stronger execution could result in gains exceeding 50%. With resilient recurring revenue, improving governance, and accelerating profitability, Masimo presents a compelling risk-reward opportunity with limited downside and multiple catalysts for re-rating over the next 12 to 18 months.
Previously, we covered a bullish thesis on Medtronic plc (MDT) by Investing Intel in May 2025, which highlighted strong organic growth, margin expansion, and the planned diabetes spin-off to unlock value and improve focus. MDT’s stock price has appreciated by approximately 1.51% since our coverage. GCA shares a similar view but emphasizes on Masimo Corporation’s turnaround, governance reset, and high-margin recurring revenue model.
Masimo Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held MASI at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of MASI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MASI and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
