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Masimo (MASI) Presents Utility Study of Oxygen Reserve Index


Irvine, CA-based Masimo Corporation MASI recently announced data from its study evaluating the potential clinical utility of Masimo Oxygen Reserve Index (ORi). ORi is being developed by the company as an early warning of arterial hemoglobin desaturation in critically ill patients, but it has not yet received FDA 510(k) clearance and is not available for sale in the US.

Stock Performance

Masimo has had an impressive run on the bourse in the last six months. The company gained roughly 37.2%, which is higher than the Zacks categorized Medical instruments sub industry’s addition of almost 14.7%.
The current level compares favorably with the S&P 500’s return of 8.4% over the same time frame. This, together with a long-term expected earnings growth rate of 15%, instills confidence in investors.

The estimate revision for the stock has been favorable. The year has seen five estimates move north over the last two months, compared with no movement in the opposite direction. As a result, the full-year estimates jumped 6.4% to $2.32 over the same time frame. Masimo currently carries a Zacks Rank #3 (Hold).

Coming back to the news, Masimo presented the study at the recently held International Anesthesia Research Society Annual Meeting in Washington, DC. In the study, researchers evaluated the potential clinical utility of Masimo ORi as an early warning of arterial hemoglobin desaturation in critically ill patients.

Masimo’s proprietary ORi is a relative indicator of the partial pressure of oxygen in arterial blood (PaO2) in the range of 100 to 200 mmHg. ORi is intended to supplement, not replace, oxygen saturation (SpO2) monitoring and PaO2 measurements. The researchers concluded that the study demonstrated the potential utility of ORi as an advanced warning of arterial desaturation and as an adjunct to SpO2. They also concluded that the additional warning time can potentially translate to improved patient safety by seeking help earlier.

Bottom Line

These latest developmnets will strengthen the company’s product portfolio, helping the company to tap into abundant opportunities in the market. Masimo’s other non-invasive products like SET pulse oximeter and rainbow SET technology have been key growth catalysts. New product launches and growing installed base of its existing devices are going to help Masimo gain greater market traction.

Going forward we believe Masimo’s innovative product portfolio is a key catalyst. Wider adoption of non-invasive patient monitoring technology will help the company gain market traction. The company’s SET pulse oximetry business represents considerable growth opportunities in international markets.

Key Picks

Few better-ranked medical stocks are Align Technology, Inc. ALGN, Inogen, Inc. INGN and Accelerate Diagnostics, Inc. AXDX. Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technologyhas an expected long-term adjusted earnings growth rate of almost 24%. The stock added roughly 43.8% over last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 81.4%.

Accelerate Diagnostics has an expected long-term adjusted earnings growth rate of 30%. The stock has added roughly 9.8% over last three months.

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