Masimo stock tanks 25% on disappointing preliminary Q2 results

Shares of Masimo Corp (NASDAQ: MASI) are down 25% this morning after the medical technology company reported a broadly disappointing preliminary results for its fiscal second quarter.

Masimo stock down on a big hit to revenue

The California-based company now expects its revenue to fall between $453 million and $457 million in Q2. In comparison, analysts were at a much higher $553 million.

Masimo attributed the weakness to delayed orders, an early end to the flu season, and strained hospital budgets amid higher personnel costs. Still, analysts at Stifel said in a research note today:

At writing, Masimo stock is down about 40% versus its year-to-date high.

Should you buy Masimo stock on the pull back?

Masimo also said in the press release that it will likely trim the lower end of its full-year outlook for healthcare revenue to $1.3 billion. It had previously guided for $1.45 billion instead.

The non-healthcare business, it added, is expected to bring in up to $850 million this year – down $145 million versus its earlier outlook. Note that the Stifel analysts did agree in their research note that the Nasdaq-listed firm will be challenged in the near-term.

They downgraded Masimo stock this morning to “hold” and slashed their price target significantly to $120 that no longer suggests a meaningful upside from here.