📊 AI Stock Rating — Summary

Masimo Corporation reported revenues of $371.5 million for Q3 2025, with a net loss of $100.4 million, translating to an EPS of -$1.86. Despite the negative earnings, the company generated a positive free cash flow of $50.9 million. Revenue experienced a growth year-over-year, but profitability faced challenges due to increased operating expenses or particular one-time costs. Masimo maintained a solid free cash flow, supported by disciplined capital expenditure management and robust operating cash inflow. On the balance sheet, Masimo's liabilities outpace its net debt, reflecting a conservative financial strategy. The equity base seems strong relative to liabilities, although the negative net income is concerning. The company did not declare dividends in recent times, with a focus on share repurchases amounting to $163.3 million, indicating a shift towards enhancing shareholder value through buybacks instead of dividends. Market sentiment, as reflected by price targets ranging up to $210, suggests potential upside from current levels subject to improved profitability metrics. The overall stock valuation against peers and current P/E might appear stretched, depending on future growth prospects.

AI Score Breakdown

Revenue Growth — Score: 6/10

Revenue increased, yet profitability issues persist. Growth driven primarily by higher market penetration in key verticals.

Profitability — Score: 3/10

Negative EPS and net income highlight significant profitability challenges, possibly from increased operational spending or one-off expenses.

Cash Flow Quality — Score: 7/10

Positive free cash flow indicates good cash generation, supported by efficient capex and solid operating cash flow despite net losses.

Leverage & Balance Sheet — Score: 6/10

Net debt is moderate relative to equity, reflecting a stable balance sheet, though profit margins should be monitored due to net losses.

Shareholder Returns — Score: 5/10

Despite negative price performance, significant share buybacks were conducted. No dividends were paid, focusing on buybacks to return capital.

Analyst Sentiment & Valuation — Score: 5/10

Valuation appears pressured, but analyst price targets suggest upside potential. P/E ratios imply market expectations for profit recovery.

⚠ AI-generated — informational only, not financial advice.