Collins Stewart: Masimo's '11 Ends Well and '12 Guidance May Prove Conservative

According to a research report published today by Collins Stewart, Masimo Corporation's

4Q11 results provided initial 2012 guidance that were in line with consensus. In the report, Masimo explained further, “Following a couple quarters of downward revisions, we view this as a positive. Rainbow revenue rebounded during the quarter (+16% yr/yr), adjusted gross margin was a bit better than expected, and operating expenses were under control. For 2012, management expects continued share gains, especially on the back of record contract bookings signed in 4Q11. With a significant amount of recurring revenue, ongoing share gains, improving margins, and a sizable market opportunity with its Rainbow platform, we view Masimo as our favorite small cap stock and reiterate our Buy rating.” Collins Stewart maintains its $26 PT on Masimo, which closed yesterday at $21.59.