Masimo (NASDAQ:MASI) was already a well-established play in medical monitoring before COVID-19, with leading share in pulse oximetry through its proprietary Signal Extraction Technology (or SET), and had already started offering some hospital automation components, but COVID-19 has definitely accelerated the business plan. Hospital administrators have gained more appreciation for the potential of combining more widespread general floor monitoring with automation.
There’s a lot of potential left in the Masimo story, including increased penetration of Rainbow (advanced monitoring beyond the core SET pulse oximetry offerings), increased automation, and home/remote offerings through the SafetyNet platform. The “but” is that investors have to pay a steep price for that exposure, with Masimo already trading at around 12x ’22 revenue. Bullish investors will point to the multibillion-dollar addressable opportunities like hospital automation and Opioid SafetyNet as justification, but at this price there’s little safety net if the company trips up on execution.
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Masimo Corp Offers Exciting Hospital Automation Exposure, But At A High Price
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