DCF Tool

MASI

Masimo Corp – Electromedical and Electrotherapeutic Apparatus Manufacturing
Masimo is a global medical technology company that develops and produces a wide array of industry-leading monitoring technologies, including innovative measurements, sensors, patient monitors, and automation and connectivity solutions. Masimo's mission is to improve patient outcomes and reduce the cost of care. Masimo SET® Measure-through Motion and Low Perfusion™ pulse oximetry, introduced in 1995, has been shown in over 100 independent and objective studies to outperform other pulse oximetry technologies.4 Masimo SET® has also been shown to help clinicians reduce severe retinopathy of prematurity in neonates,5 improve CCHD screening in newborns,6 and, when used for continuous monitoring with Masimo Patient SafetyNet™ in post-surgical wards, reduce rapid response team activations, ICU transfers, and costs.7-10 Masimo SET® is estimated to be used on more than 200 million patients in leading hospitals and other healthcare settings around the world,11 and is the primary pulse oximetry at 9 of the top 10 hospitals according to the 2020-21 U.S. News and World Report Best Hospitals Honor Roll.12 Masimo continues to refine SET® and in 2018, announced that SpO2 accuracy on RD SET® sensors during conditions of motion has been significantly improved, providing clinicians with even greater confidence that the SpO2 values they rely on accurately reflect a patient's physiological status. In 2005, Masimo introduced rainbow® Pulse CO-Oximetry technology, allowing noninvasive and continuous monitoring of blood constituents that previously could only be measured invasively, including total hemoglobin (SpHb®), oxygen content (SpOC™), carboxyhemoglobin (SpCO®), methemoglobin (SpMet®), Pleth Variability Index (PVi®), RPVi™ (rainbow® PVi), and Oxygen Reserve Index (ORi™). In 2013, Masimo introduced the Root® Patient Monitoring and Connectivity Platform, built from the ground up to be as flexible and expandable as possible to facilitate the addition of other Masimo and third-party monitoring technologies; key Masimo additions include Next Generation SedLine® Brain Function Monitoring, O3® Regional Oximetry, and ISA™ Capnography with NomoLine® sampling lines. Masimo's family of continuous and spot-check monitoring Pulse CO-Oximeters® includes devices designed for use in a variety of clinical and non-clinical scenarios, including tetherless, wearable technology, such as Radius-7® and Radius PPG™, portable devices like Rad-67™, fingertip pulse oximeters like MightySat® Rx, and devices available for use both in the hospital and at home, such as Rad-97®. Masimo hospital automation and connectivity solutions are centered around the Masimo Hospital Automation™ platform, and include Iris® Gateway, iSirona™, Patient SafetyNet, Replica™, Halo ION™, UniView™, UniView :60™, and Masimo SafetyNet™.
Analysis Results
Intrinsic Value $101.59
Latest Price $139.04
Relative Value 37% overvalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 17.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 10.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 17.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 306 276
2023 360 294
2024 423 312
2025 498 332
2026 586 353
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 6920 million. This corresponds to a present value of 3770 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1570 million. Adding in the terminal value gives a total present value of 5340 million.

There are presently 52.6 million outstanding shares, so the intrinsic value per share is 101.59.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,238,412,000
Current Cash 745,250,000
Current Liabilities 267,736,000
Current Debt 0
Non-Cash Working Capital (NCWC) 225,426,000
Change in NCWC -3,925,000
EBIT 275,822,000
Tax Provision 44,733,000
Depreciation and Amortization 35,620,000
Capital Expenditure -34,929,000
Unlevered Free Cash Flow 227,619,906
Current Assets 1,101,165,000
Current Cash 641,447,000
Current Liabilities 230,367,000
Current Debt 0
Non-Cash Working Capital (NCWC) 229,351,000
Change in NCWC 93,195,000
EBIT 255,349,000
Tax Provision 23,454,000
Depreciation and Amortization 29,300,000
Capital Expenditure -79,957,000
Unlevered Free Cash Flow 275,178,854
Current Assets 996,062,000
Current Cash 687,687,000
Current Liabilities 172,219,000
Current Debt 0
Non-Cash Working Capital (NCWC) 136,156,000
Change in NCWC 51,156,000
EBIT 221,216,000
Tax Provision 37,950,000
Depreciation and Amortization 23,487,000
Capital Expenditure -72,492,000
Unlevered Free Cash Flow 187,515,735
Current Assets 785,097,000
Current Cash 552,490,000
Current Liabilities 147,607,000
Current Debt 0
Non-Cash Working Capital (NCWC) 85,000,000
Change in NCWC -12,250,000
EBIT 208,469,000
Tax Provision 20,233,000
Depreciation and Amortization 21,127,000
Capital Expenditure -22,683,000
Unlevered Free Cash Flow 174,932,285
Current Assets 564,119,000
Current Cash 315,302,000
Current Liabilities 151,567,000
Current Debt 0
Non-Cash Working Capital (NCWC) 97,250,000
Change in NCWC 116,288,000
EBIT 197,361,000
Tax Provision 67,758,000
Depreciation and Amortization 20,061,000
Capital Expenditure -46,763,000
Unlevered Free Cash Flow 219,873,125
Current Assets 507,227,000
Current Cash 305,970,000
Current Liabilities 220,366,000
Current Debt 71,000
Non-Cash Working Capital (NCWC) -19,038,000
Change in NCWC -53,304,000
EBIT 150,770,000
Tax Provision 117,675,000
Depreciation and Amortization 16,817,000
Capital Expenditure -24,351,000
Unlevered Free Cash Flow 47,521,957
Current Assets 299,142,000
Current Cash 132,317,000
Current Liabilities 132,633,000
Current Debt 74,000
Non-Cash Working Capital (NCWC) 34,266,000
Change in NCWC -22,607,000
EBIT 100,641,000
Tax Provision 34,845,000
Depreciation and Amortization 15,684,000
Capital Expenditure -54,594,000
Unlevered Free Cash Flow 8,982,303
Current Assets 315,141,000
Current Cash 134,453,000
Current Liabilities 123,894,000
Current Debt 79,000
Non-Cash Working Capital (NCWC) 56,873,000
Change in NCWC -15,780,000
EBIT 93,182,000
Tax Provision 27,678,000
Depreciation and Amortization 12,818,000
Capital Expenditure -78,414,000
Unlevered Free Cash Flow -13,469,050
Current Assets 271,798,000
Current Cash 95,466,000
Current Liabilities 103,790,000
Current Debt 111,000
Non-Cash Working Capital (NCWC) 72,653,000
Change in NCWC 14,344,000
EBIT 87,727,000
Tax Provision 20,005,000
Depreciation and Amortization 11,421,000
Capital Expenditure -13,016,000
Unlevered Free Cash Flow 77,300,622
Current Assets 219,347,000
Current Cash 71,554,000
Current Liabilities 89,539,000
Current Debt 55,000
Non-Cash Working Capital (NCWC) 58,309,000
Change in NCWC 1,161,000
EBIT 85,226,000
Tax Provision 21,883,000
Depreciation and Amortization 9,369,000
Capital Expenditure -14,492,000
Unlevered Free Cash Flow 59,014,199

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