The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Masimo (NASDAQ: MASI) and the rest of the patient monitoring stocks fared in Q1.
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 strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.9% below.
Luckily, patient monitoring stocks have performed well with share prices up 18.6% on average since the latest earnings results.
Weakest Q1: 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 $372 million, up 9.5% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ constant currency revenue estimates but a significant miss of analysts’ full-year EPS guidance estimates.
Katie Szyman, Chief Executive Officer of Masimo, said, “Since joining Masimo as CEO three months ago, I have been focused on immersing myself in our business. I have visited customers, employees, manufacturing and R&D sites, evaluated our innovation pipeline, and attended national meetings with our sales team. My key takeaways are that our technology advantage is real, we have a stellar team that is enthusiastic about the path forward at Masimo, and we have an opportunity to build and improve from a position of meaningful strength. Our first quarter results clearly demonstrate the earnings power of our core business as we delivered double-digit revenue growth and exceptional earnings growth.”
Masimo delivered the weakest full-year guidance update of the whole group. The stock is up 2.3% since reporting and currently trades at $164.39.
Read our full report on Masimo here, it’s free.
Best Q1: 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 $569 million, up 28.8% year on year, outperforming analysts’ expectations by 4.8%. The business had an exceptional quarter with a solid beat of analysts’ constant currency revenue and EPS estimates.
Insulet achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 26.5% since reporting. It currently trades at $325.
Is now the time to buy Insulet? Access our full analysis of the earnings results here, it’s free.
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 $1.29 billion, up 7.9% year on year, in line with analysts’ expectations. It was a decent quarter as it posted EPS and constant currency revenue in line with analysts’ estimates.
ResMed delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 13.9% since the results and currently trades at $244.10.
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 $1.04 billion, up 12.5% year on year. This number surpassed analysts’ expectations by 1.8%. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ organic revenue estimates.
The stock is up 21.2% since reporting and currently trades at $85.14.
Read our full, actionable report on DexCom here, it’s free.
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 $158.7 million, up 20.3% year on year. This result topped analysts’ expectations by 3.3%. Overall, it was a strong quarter as it also produced full-year revenue guidance beating analysts’ expectations.
iRhythm delivered the highest full-year guidance raise among its peers. The stock is up 29% since reporting and currently trades at $140.65.
Read our full, actionable report on iRhythm here, it’s free.
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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