MASI
Masimo Corporation
$178.81
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 123.1% above fair value
You pay
$178.81
Bear
$65.10
Fair
$80.14
Bull
$93.41
Bear
$65.10
-63.6%
4% stage 1 growth, 11% discount
Fair
$80.14
-55.2%
6% stage 1 growth, 11% discount
Bull
$93.41
-47.8%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
57.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $187.50 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $80.14 per share.
Warnings
Wall Street's average price target is $187.50 (from 23 analysts). Our estimate is 76% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions