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MASI, Masimo

Medical Devices & Equipment consumer brand Cyclical

The Masimo Hospital Automation Platform facilitates data integration, connectivity and interoperability through solutions like Patient SafetyNet , Iris , iSirona , Replica and UniView to facilitate more efficient clinical workflows and to help clinicians provide the best possible care, both in-person and remotely.

We are a global medical technology company that develops and produces a wide array of industry-leading monitoring technologies, including innovative measurements, sensors, and patient monitors.

Powered by the Masimo Hospital Automation and Masimo SafetyNet platforms, Masimo connectivity, automation, and telehealth and telemonitoring solutions are improving and automating care delivery in the hospital.

Latest annual: FY2026 10-K

MASI · Masimo

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026

$1.5B

+9.4% YoY · 10% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.6B 5-yr avg $1.5B

Gross margin 62% 5-yr avg 59%

Operating margin 19.9% 5-yr avg 14.1%

Owner-earnings margin 14% 5-yr avg 9%

Free cash flow margin 14% 5-yr avg 8%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 65% and operating margin about 20% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The margin is cyclical, swinging between 4.5% and 61% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Inventory runs near 12% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the installed base and what follows it. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 30%, above 15% in 6 of 8 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 14% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2015–2026

realized figures from each filing · older years to the left

2015’15	2016’16	2017’17	2018’18	2019’19	2021’21	2022’22	2023’23	2024’24	2026’26	TTMTTMApr 2026
											Income statement
$587M	$713M	$790M	$858M	$938M	$1.1B	$2.0B	$1.3B	$1.4B	$1.5B	$1.6B	RevenueRevenue
67%	67%	66%	67%	67%	65%	52%	60%	57%	62%	62%	Gross marginGross mgn
41%	36%	35%	33%	34%	32%	32%	35%	39%	33%	34%	SG&A / revenueSG&A/rev
10%	8%	8%	9%	10%	10%	9%	10%	13%	8%	8%	R&D / revenueR&D/rev
$104M	$436M	$184M	$208M	$221M	$256M	$210M	$166M	$63M	$310M	$309M	Operating incomeOp. inc.
17.6%	61.2%	23.3%	24.2%	23.6%	22.4%	10.3%	13.0%	4.5%	20.3%	19.9%	Operating marginOp. mgn
$73M	$311M	$125M	$194M	$196M	$240M	$144M	$82M	($305M)	($152M)	$76M	Net incomeNet inc.
28%	28%	33%	9%	16%	9%	26%	6%	—	—	43%	Effective tax rateTax rate
											Cash flow & returns
$96M	$419M	$56M	$240M	$222M	$211M	$29M	$94M	$196M	$218M	$232M	Operating cash flowOp. cash
$13M	$17M	$20M	$21M	$23M	$29M	$136M	$39M	$49M	$39M	$38M	DepreciationDeprec.
($728K)	$79M	($106M)	($3M)	($37M)	($101M)	($298M)	($32M)	$417M	$295M	$82M	Working capital & otherWC & other
$75M	$20M	$44M	$17M	$68M	$73M	$53M	$38M	$21M	$19M	$21M	CapexCapex
12.8%	2.8%	5.5%	2.0%	7.3%	6.3%	2.6%	3.0%	1.5%	1.3%	1.4%	Capex / revenueCapex/rev
$83M	$399M	$36M	$222M	$198M	$182M	($23M)	$56M	$175M	$198M	$211M	Owner earningsOwner earn.
14.1%	56.0%	4.6%	25.9%	21.1%	15.9%	−1.1%	4.4%	12.6%	13.0%	13.5%	Owner earnings marginOE mgn
$21M	$399M	$12M	$222M	$153M	$139M	($23M)	$56M	$175M	$198M	$211M	Free cash flowFCF
3.5%	56.0%	1.6%	25.9%	16.3%	12.1%	−1.1%	4.4%	12.6%	13.0%	13.5%	Free cash flow marginFCF mgn
$0	$0	$0	$4M	$0	$113M	$1000M	$0	$0	—	$0	AcquisitionsAcquis.
$102M	$68M	$66M	$18M	$38M	$111M	$402M	$0	$0	$364M	—	BuybacksBuybacks
25%	71%	30%	45%	31%	30%	7%	7%	—	—	—	ROICROIC
24%	56%	17%	20%	17%	17%	11%	6%	-29%	-21%	10%	Return on equityROE
24%	56%	17%	20%	17%	17%	11%	6%	−29%	−21%	10%	Retained to equityRetained/eq
											Balance sheet
$134M	$306M	$315M	$552M	$688M	$641M	$203M	$163M	$124M	$152M	$125M	Cash & investmentsCash+inv
$71M	$81M	$119M	$110M	$132M	$141M	$446M	$224M	$283M	$276M	$239M	ReceivablesReceiv.
$70M	$73M	$92M	$95M	$116M	$216M	$501M	$545M	$295M	$380M	$400M	InventoryInvent.
$38M	$34M	$34M	$40M	$55M	$64M	$277M	$252M	$129M	$103M	$89M	Accounts payablePayables
$103M	$119M	$177M	$164M	$194M	$293M	$670M	$518M	$449M	$553M	$550M	Operating working capitalOper. WC
$297M	$507M	$560M	$789M	$996M	$1.1B	$1.3B	$1.2B	$1.2B	$926M	$871M	Current assetsCur. assets
$124M	$220M	$130M	$147M	$172M	$234M	$630M	$564M	$618M	$372M	$325M	Current liabilitiesCur. liab.
2.4×	2.3×	4.3×	5.4×	5.8×	4.7×	2.1×	2.2×	2.0×	2.5×	2.7×	Current ratioCurr. ratio
$21M	$20M	$21M	$23M	$22M	$103M	$445M	$99M	$97M	$101M	$101M	GoodwillGoodwill
$565M	$821M	$905M	$1.2B	$1.4B	$1.7B	$3.2B	$3.0B	$2.6B	$1.7B	$1.6B	Total assetsAssets
$125M	$185M	—	—	—	—	$957M	$906M	$729M	$524M	$452M	Total debtDebt
($9M)	($121M)	—	—	—	—	$754M	$743M	$606M	$372M	$327M	Net debt / (cash)Net debt
—	133.7×	271.1×	294.7×	674.4×	852.7×	700.0×	3.3×	1.5×	9.3×	10.1×	Interest coverageInt. cov.
$306M	$560M	$724M	$969M	$1.2B	$1.4B	$1.3B	$1.4B	$1.1B	$721M	$789M	Shareholders’ equityEquity
1.9%	1.8%	2.2%	3.2%	4.2%	3.7%	2.3%	0.5%	2.6%	2.3%	2.3%	Stock comp / revenueSBC/rev
—	—	$400K	—	—	—	—	—	$294M	—	$294M	Goodwill written downGW imp.
											Per share
55.6M	53.2M	55.9M	56.0M	57.1M	58.0M	55.2M	54.1M	54.4M	54.2M	52.6M	Shares out (diluted)Shares
$10.56	$13.40	$14.14	$15.32	$16.42	$19.72	$36.88	$23.58	$25.65	$28.17	$29.63	Revenue / shareRev/sh
$1.30	$5.85	$2.23	$3.45	$3.44	$4.14	$2.60	$1.51	$-5.60	$-2.80	$1.45	EPS (diluted)EPS
$1.49	$7.51	$0.64	$3.97	$3.47	$3.13	$-0.42	$1.03	$3.22	$3.66	$4.01	Owner earnings / shareOE/sh
$0.37	$7.51	$0.22	$3.97	$2.68	$2.39	$-0.42	$1.03	$3.22	$3.66	$4.01	Free cash flow / shareFCF/sh
$1.35	$0.37	$0.78	$0.31	$1.20	$1.25	$0.96	$0.71	$0.39	$0.36	$0.40	Cap. spending / shareCapex/sh
$5.51	$10.53	$12.96	$17.29	$20.45	$24.27	$24.26	$25.23	$19.34	$13.31	$15.00	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	11-yr	5-yr
Revenue / share	+9.3%/yr	+7.4%/yr
Owner earnings / share	+8.5%/yr	+3.2%/yr
Capital spending / share	−11.4%/yr	−22.1%/yr
Book value / share	+8.4%/yr	−11.3%/yr

The record, charted

FY2015–2026

Each measure over its full record; the current point and the worst year marked.

Share count

54Mpeak FY2021

ROIC

7%low FY2023

Gross margin

62%low FY2022

Net debt ÷ owner earnings

1.9×peak FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$198Mowner earningsvs.($152M)net incomelow FY2022

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2015FY2026

Owner-earnings bridge

FY2021–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business turned a $152M loss into $198M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2026	FY2024	FY2023	FY2022	FY2021
Reported net income	($152M)	($305M)	$82M	$144M	$240M
Depreciation & amortizationnon-cash charge added back	+$39M	+$49M	+$39M	+$136M	+$29M
Stock-based compensationreal costnon-cash, but a real cost	+$36M	+$36M	+$6M	+$48M	+$42M
Working capital & othertiming of cash in and out, other non-cash items	+$295M	+$417M	−$32M	−$298M	−$101M
Cash from operations	$218M	$196M	$94M	$29M	$211M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$19M	−$21M	−$38M	−$53M	−$29M
Owner earnings	$198M	$175M	$56M	($23M)	$182M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	—	—	—	−$43M
Free cash flow	$198M	$175M	$56M	($23M)	$139M
Owner-earnings marginowner earnings ÷ revenue	13%	13%	4%	-1%	16%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $36M), owner earnings is nearer $163M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 9.3×

Comfortable

Operating income $310M ÷ interest expense $33M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $372M · 1.2× operating profit

Modest net debt

Cash $152M − debt $524M

What this means
Netting $152M of cash and short-term investments against $524M of debt leaves $372M owed, about 1.2× a year's operating profit (1.7× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 240d

Long (60+ days)

DSO 66 + DIO 239 − DPO 65 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 30%

Very high (≥25%) through the cycle

8-yr median, range 7%–71%; the latest year is left out — large non-operating charges put its operating line well above pretax profit

Industry peers: median 4%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years, so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 13%

Solid through the cycle

10-yr median margin, range -1%–56%; latest $198M = operating cash $218M − maintenance capex $19M

Industry peers: median 7%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 13% of revenue this year, a 13% median across 10 years. Treating stock comp as the real expense it is (less $36M of SBC) leaves $163M.
Are earnings backed by cash? $218M

Loss, but cash-generative

Net income ($152M) · cash from operations $218M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 183%

Returned more than it generated

Dividends + buybacks $364M ÷ Owner Earnings $198M

What this means
The company returned more than it generated: against $198M of Owner Earnings, $364M (183%) went back to shareholders, $0 dividends, $364M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $36M stock comp, the real buyback was about $328M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.50×

Harvesting

Capex $19M ÷ depreciation $39M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.5B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.49×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $524M vs $554M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −174%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-2.39/share (latest year $-2.89), the averaged base the calculator's gate runs on, and book value is $13.77/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2015–2026

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 10

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 3 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 34% → 13% (3-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 34% early to 13% lately, median 20% — competition or costs are biting in.
Reinvestment, incremental ROIC −3%

What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
Owner earnings growth −2%/yr

What this means
Owner earnings shrank about 2% a year over the record.
Worst year 2024 · 4.5% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −0.2%/yr

What this means
Roughly flat share count, little dilution, little buyback.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Raised, but not as a competitor

The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 4, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$871M

Cash & short-term investments$125M
Receivables$239M
Inventory$400M
Other current assets$107M

Current liabilities$325M

Debt due within a year$6M
Accounts payable$89M
Other current liabilities$230M

Current ratio2.68×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.45×stricter: inventory excluded

Cash ratio0.38×strictest: cash alone against what's due

Working capital$545Mthe cushion left after near-term bills

Debt due this year vs. cash$6M due · $125M cash covered by cash on hand, no refinancing forced · both figures from the Apr 4, 2026 balance sheet

Revenue, latest quarter vs. a year ago+8.5%the freshest read on whether the business is still growing

Current ratio, recent quarters2.1× → 2.7×

Deeper floors

Tangible book value$637Mequity stripped of goodwill & intangibles

Net current asset value$17MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$486M$34M of it operating leases

Deferred revenue$93Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$6M

'27$6M

'28$6M

'29$6M

'30$499M

Bars scaled to the largest single year.

Due in the next 12 months$6Mthe first rung: what must be repaid or rolled over within the year

Within two years$13Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$499Min 2030the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$524Mevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Apr 4, 2026$125M

One year of owner earnings (FY2026)$198M

Together, against $6M due next year51.3×

Cash on hand as of Apr 4, 2026 plus a year’s owner earnings comes to $323M against the $6M due in the twelve months after the Jan 3, 2026 schedule: 51 times it.

Maturity schedule extracted from the company’s Jan 3, 2026 annual report and reconciled to the total the table states.

How the cash was used, 2015–2026

Over the record, the business generated $1.8B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$428M · 24%
Buybacks$1.2B · 66%
Retained (debt / cash)$184M · 10%

Returned to owners$1.2B
77% of the owner earnings the business produced over the span, $0 as dividends and $1.2B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $327M and cash and short-term investments fell $10M.
Average price paid for buybacks$88.35
Across the years where the filing reports a share count, 13M shares were bought for $1.2B, about $88.35 each. Year to year the price paid ranged from $23.00 (2015) to $221.00 (2021); its heaviest year, 2022, paid $133.83 ($402M).
Net change in share count−5.3%
The diluted count fell from 56M to 53M, so the buybacks outran the stock issued to staff.
Dividend record$0.00/sh
Paid no dividend over the span; it returns cash through buybacks or retains it.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$153M9% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity14%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$1.1Bover 10 years buying other businesses, against $428M of capital spent building

$294M written down across 2 years (2017, 2024): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 26% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Kiani	$15.5M	$118.0M	$182M
2022	Mr. Kiani	$16.5M	−$34.0M	($23M)
2023	Mr. Kiani	$15.5M	−$22.2M	$56M
2024	Mr. Kiani	$15.9M	−$4.3M	$175M
2024	Ms. Brennan	$1.7M	$2.1M	$175M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$36M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 12% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Masimo is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2015–2026.

3 of the 6 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?10.0% vs 24.9%
The owner-earnings margin averaged 24.9% early in the record and 10.0% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$125M → $452M
Debt rose from $125M to $452M while owner earnings went from about $173M to $143M — about 0.7 years of owner earnings in debt then, about 3.2 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereDid receivables and inventory outpace sales?24% → 41% of sales
Receivables and inventory grew from $141M to $639M while revenue grew 166%: working capital is climbing faster than sales (24% of revenue then, 41% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2026

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Inventory, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Medical Devices & Equipment

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
TFXTeleflex	$2.0B	55%	16.6%	7%	13%
IARTIntegra Lifesciences Holdings Corp	$1.6B	62%	7.4%	4%	8%
MASIMasimo	$1.5B	66%	21.3%	30%	14%
PENPenumbra	$1.4B	65%	0.5%	0%	3%
LIVNLivaNova PLC	$1.4B	67%	-3.0%	-4%	6%
CNMDCONMED	$1.4B	55%	7.9%	5%	7%
HAEHaemonetics	$1.3B	50%	10.4%	7%	11%
TNDMTandem Diabetes Care	$1.0B	52%	-15.0%	-24%	-1%
Group median	—	58%	7.6%	5%	7%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Masimo has delivered.

Today’s price $

Through the cycle, Masimo earns about $207M on its 13.6% median owner-earnings margin. This year’s 13.0% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($207M) Net of stock comp (−$36M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’26+19%/yr

Owner-earnings growth · ’15→’26−1%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’26)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $211M on 52M shares outstanding, per the 10-Q cover, as of 2026-04-04; net debt $327M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh MASI against another business →

Cite: Owner Scorecard, "Masimo (MASI), the owner's record," https://ownerscorecard.com/c/MASI, data as of 2026-07-09.

Manual order: ← MAS its page in the Manual MASS →

Industry order: ← LMAT the Medical Devices & Equipment chapter MBOT →