Masimo Corporation Positioned for Continued Earnings Surprises
If you’re on the lookout for a stock that has a solid track record of consistently beating earnings estimates, consider Masimo (MASI). This company, part of the Zacks Medical – Instruments sector, shows great potential ahead of its next quarterly earnings report.
Strong Earnings History
Masimo has demonstrated impressive performance in surpassing earnings expectations in its last two reports. On average, it has exceeded estimates by 18.74% during this period.
In the latest quarter, analysts anticipated earnings of $1.49 per share, but Masimo reported $1.80 per share, resulting in a surprise of 20.81%. In the quarter before that, the consensus estimate was $0.84 per share, yet the actual earnings were $0.98 per share, leading to a surprise of 16.67%.
Analyzing Price and EPS Surprise
This favorable history has led to a positive shift in earnings estimates for Masimo recently. The Zacks Earnings ESP (Expected Surprise Prediction) for Masimo indicates a strong likelihood of an earnings surprise, supported by its favorable Zacks Rank.
Research suggests that stocks with a positive Earnings ESP and a Zacks Rank of #3 (Hold) or higher achieve a positive earnings surprise nearly 70% of the time. Essentially, if you analyze 10 stocks with this profile, about seven may exceed consensus estimates.
The Zacks Earnings ESP calculates the Most Accurate Estimate against the Zacks Consensus Estimate for the given quarter. The Most Accurate Estimate reflects the latest revisions by analysts, which often incorporate the newest data available, potentially yielding a more accurate prediction.
Currently, Masimo has an Earnings ESP of +0.64%, indicating that analysts are becoming more optimistic about the company’s future earnings. Coupled with a Zacks Rank of #1 (Strong Buy), this suggests that another earnings beat could be forthcoming.
Understanding Earnings ESP Limitations
It is important to note that a negative Earnings ESP can diminish the prediction reliability. However, a negative value does not inherently imply that the company will miss its earnings target.
Numerous companies surpass the consensus EPS estimate for various reasons, and some may sustain their share prices even after a earnings miss. This variability underscores why checking a company’s Earnings ESP ahead of its quarterly announcements is crucial for boosting investment success.
For those looking to identify the best stocks for investment before earnings reports, utilizing our Earnings ESP Filter can be a valuable resource.
Future Growth Potential in Semiconductor Sector
In parallel news, Zacks has identified the top semiconductor stock, which is significantly smaller than NVIDIA but has vast potential for growth. The semiconductor manufacturing industry is poised for substantial expansion, predicted to grow from $452 billion in 2021 to $803 billion by 2028.
This company’s strong earnings growth and expanding clientele position it to meet increasing demands in Artificial Intelligence, Machine Learning, and the Internet of Things.
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Masimo Corporation (MASI): Free Stock Analysis Report
Originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
