Patient Monitoring Stocks Q3 Recap: Benchmarking Masimo (NASDAQ:MASI)

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Masimo (NASDAQ:MASI) and the best and worst performers in the patient monitoring industry.

Patient monitoring companies within the healthcare equipment industry offer devices and technologies that track chronic conditions and support real-time health management, such as continuous glucose monitors (CGMs) and sleep apnea machines. These businesses benefit from recurring revenue from consumables and software subscriptions tied to device sales (razor, razor blade model). The rising prevalence of chronic diseases like diabetes and respiratory disorders due to an aging population as well as growing adoption of digitization are good for the industry. However, these companies face challenges from high R&D costs and reliance on regulatory approvals. Looking ahead, the sector is positioned for growth due to tailwinds like the rising burden of chronic diseases from an aging population, the shift toward value-based care, and increased adoption of digital health solutions. Innovations in AI and machine learning are expected to enhance device accuracy and functionality, improving patient outcomes and driving demand. However, there are headwinds such as pricing pressures as healthcare costs are a key focus, especially in the US. An evolving regulatory landscape and competition from more tech-forward new entrants could present additional challenges.

The 5 patient monitoring stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.

While some patient monitoring stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.7% since the latest earnings results.

Masimo (NASDAQ:MASI)

Founded in 1989 to solve the "unsolvable problem" of accurate pulse oximetry during patient movement, Masimo (NASDAQ:MASI) develops and manufactures noninvasive patient monitoring technologies, including its breakthrough pulse oximetry systems that accurately measure blood oxygen levels even during patient movement.

Masimo reported revenues of $371.5 million, up 8.2% year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a strong quarter for the company with a solid beat of analysts’ full-year EPS guidance estimates and full-year operating income guidance beating analysts’ expectations.

Katie Szyman, Chief Executive Officer of Masimo, said, “In the third quarter, we saw continued positive momentum across our core healthcare business, driven by the power of our innovative products. Revenues grew 8%, operating margin improved by 450 basis points, and EPS grew by 38%, all driven by sales growth and our successful operating efficiency initiatives. During the quarter, we closed the sale of Sound United to Harman and used the net proceeds to repurchase common stock. We also announced the expansion of our strategic partnership with Philips. We continue to invest in our core healthcare business to position for strong, sustainable long-term growth, and look forward to sharing more details on our strategy and innovations at our upcoming Investor Day on December 3rd.”

Masimo scored the highest full-year guidance raise but had the slowest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 4.8% since reporting and currently trades at $141.91.

Is now the time to buy Masimo? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: iRhythm (NASDAQ:IRTC)

Pioneering the shift from bulky, short-term heart monitors to sleek, wire-free patches, iRhythm Technologies (NASDAQ:IRTC) provides wearable cardiac monitoring devices and AI-powered analysis services that help physicians detect and diagnose heart rhythm disorders.

iRhythm reported revenues of $192.9 million, up 30.7% year on year, outperforming analysts’ expectations by 4.6%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

iRhythm delivered the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3.3% since reporting. It currently trades at $178.07.

Is now the time to buy iRhythm? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: ResMed (NYSE:RMD)

Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE:RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.

ResMed reported revenues of $1.34 billion, up 9.1% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a beat of analysts’ EPS estimates but constant currency revenue in line with analysts’ estimates.

ResMed delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 1.7% since the results and currently trades at $256.51.

Read our full analysis of ResMed’s results here.

DexCom (NASDAQ:DXCM)

Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ:DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.

DexCom reported revenues of $1.21 billion, up 21.6% year on year. This number topped analysts’ expectations by 2.5%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ revenue estimates and a narrow beat of analysts’ organic revenue estimates.

DexCom had the weakest full-year guidance update among its peers. The stock is down 3.8% since reporting and currently trades at $65.44.

Read our full, actionable report on DexCom here, it’s free for active Edge members.

Insulet (NASDAQ:PODD)

Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ:PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.

Insulet reported revenues of $706.3 million, up 29.9% year on year. This result beat analysts’ expectations by 3.9%. It was an exceptional quarter as it also logged a solid beat of analysts’ constant currency revenue estimates and revenue guidance for next quarter exceeding analysts’ expectations.

The stock is down 3.3% since reporting and currently trades at $303.92.

Read our full, actionable report on Insulet here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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