Masimo Completes Divestment of Consumer Audio Business to HARMAN

Masimo Corporation MASI recently announced the completion of the divestiture of its Sound United consumer audio business to HARMAN International, a subsidiary of Samsung Electronics. This transaction marks a pivotal step in Masimo’s strategy to sharpen its focus on core professional healthcare operations, while ensuring that non-core assets find a stronger platform for growth under specialized ownership.CEO Katie Szyman highlighted the sale as “an important milestone” in Masimo’s transformation, enabling the company to concentrate resources on broadening patient impact, accelerating innovation and strengthening margins. With the completion of the divestiture, Masimo plans to deploy the proceeds primarily toward share repurchases, signaling confidence in the intrinsic value of the stock and a commitment to enhancing shareholder returns.Likely Share Price PerformanceMASI’s shares have lost 15% in the year-to-date period compared with the industry’s 11.6% decline. The S&P 500 has gained 14.2% in the same time frame.Image Source: Zacks Investment ResearchMasimo’s divestment of Sound United is likely to be viewed positively by investors, as it sharpens strategic focus, improves margins, and enables accretive share repurchases. While near-term volatility may persist due to tariff concerns, the transaction should support upward stock momentum driven by stronger core earnings and capital returns.The Rationale ExplainedFrom a strategic standpoint, the exit from consumer audio resolves a lingering overhang that had clouded investor perception since Masimo’s acquisition of Sound United in 2022. The business, while valuable, operated outside Masimo’s healthcare focus, and its financial drag was evident in first-quarter 2025, when Masimo reported a $295 million impairment charge tied to audio operations. By divesting this business, management is aligning its portfolio with long-term priorities.The timing of the sale also complements Masimo’s improving operational performance. In the first half of 2025, the healthcare business delivered double-digit constant-currency growth, gross margin expansion, and over 50% EPS growth. Management has articulated three growth “waves” — elevating commercial excellence, accelerating adoption of intelligent monitoring, and expanding into wearable patient monitoring technologies. MASI is likely to focus on these initiatives following the divestment of consumer audio.The anticipated buyback program provides a near-term financial catalyst. Masimo’s balance sheet flexibility, supported by strong operating cash flows, positions it to retire shares at attractive valuations, potentially offsetting earnings dilution from the sale. CFO Micah Young had emphasized that repurchases represent the most accretive use of proceeds in the current environment, though Masimo remains open to opportunistic tuck-in acquisitions that enhance its hospital monitoring portfolio.For shareholders, the deal removes uncertainty, tightens strategic focus, and reinforces Masimo’s growth narrative. Still, execution risks remain. The company faces tariff-related cost pressures and must successfully scale its intelligent monitoring and wearable platforms to sustain double-digit growth. Moreover, investor expectations regarding buyback execution will be high, and management must strike a balance between this and longer-term investment needs.The sale of Sound United is likely to allow Masimo to accelerate its evolution into a pure-play medtech leader. By divesting a non-core asset and doubling down on innovation in monitoring technologies, Masimo is better positioned to capture a share in large adjacent markets —capnography, hemodynamics and brain monitoring — that collectively represent multi-billion-dollar opportunities.Masimo Corporation Price Masimo Corporation price | Masimo Corporation QuoteMASI’s Zacks Rank & Other Stocks to ConsiderMASI sports a Zacks Rank #1 (Strong Buy) at present.Some other top-ranked stocks in the broader medical space are AxoGen AXGN, Inogen INGN and Envista NVST.AxoGen reported second-quarter 2025 adjusted earnings per share (EPS) of 12 cents, which beat the Zacks Consensus Estimate by 100.0%. Revenues of $57 million surpassed the consensus estimate by 7.1%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.AxoGen has an estimated growth rate of 66.7% for 2026. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 33.33%.Inogen, currently carrying a Zacks Rank of 2, reported second-quarter 2025 loss per share of 15 cents, which beat the Zacks Consensus Estimate by 31.82%. Revenues of $92 million outpaced the consensus mark by 1.76%.Inogen has an estimated growth rate of 28.9% for 2026. INGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 40.7%.Envista reported second-quarter 2025 adjusted EPS of 26 cents, which beat the Zacks Consensus Estimate by 8.3%. Revenues of $682 million surpassed the Zacks Consensus Estimate by 6.3%. It currently carries a Zacks Rank #2.Envista has a long-term estimated growth rate of 16.8%. 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Click to get this free report Masimo Corporation (MASI): Free Stock Analysis Report AxoGen, Inc. (AXGN): Free Stock Analysis Report Inogen, Inc (INGN): Free Stock Analysis Report Envista Holdings Corporation (NVST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks