Financial Analysis: Spectral AI (NASDAQ:MDAI) versus Masimo (NASDAQ:MASI)

Spectral AI (NASDAQ:MDAI) and Masimo (NASDAQ:MASI) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Insider and Institutional Ownership

67.1% of Spectral AI shares are owned by institutional investors. Comparatively, 86.0% of Masimo shares are owned by institutional investors. 30.7% of Spectral AI shares are owned by insiders. Comparatively, 9.7% of Masimo shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Spectral AI has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Masimo has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Spectral AI and Masimo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectral AI	1	0	1	0	2.00
Masimo	0	9	0	0	2.00

Spectral AI currently has a consensus price target of $3.00, suggesting a potential upside of 23.46%. Masimo has a consensus price target of $180.40, suggesting a potential upside of 1.08%. Given Spectral AI’s higher probable upside, analysts clearly believe Spectral AI is more favorable than Masimo.

Profitability

This table compares Spectral AI and Masimo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectral AI	-85.58%	N/A	-72.97%
Masimo	4.90%	31.33%	13.93%

Earnings and Valuation

This table compares Spectral AI and Masimo”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectral AI	$19.65 million	3.93	-$7.57 million	($0.53)	-4.58
Masimo	$1.56 billion	6.00	-$151.50 million	($10.54)	-16.93

Spectral AI has higher earnings, but lower revenue than Masimo. Masimo is trading at a lower price-to-earnings ratio than Spectral AI, indicating that it is currently the more affordable of the two stocks.

Summary

Spectral AI beats Masimo on 7 of the 13 factors compared between the two stocks.

About Spectral AI

Spectral AI, Inc., an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.

About Masimo

Masimo Corporation develops, manufactures, and markets various patient monitoring technologies, and automation and connectivity solutions worldwide. The company offers masimo signal extraction technology (SET) pulse oximetry with measure-through motion and low perfusion pulse oximetry monitoring to address the primary limitations of conventional pulse oximetry; Masimo rainbow SET platform, including rainbow SET Pulse CO-Oximetry products that allows noninvasive monitoring of carboxyhemoglobin, methemoglobin, hemoglobin concentration, fractional arterial oxygen saturation, oxygen content, pleth variability index, rainbow pleth variability index, respiration rate from the pleth, and oxygen reserve index, as well as acoustic respiration monitoring, SedLine brain function monitoring, NomoLine capnography and gas monitoring, and regional oximetry. It also provides brain function and hemodynamic monitoring solutions; patient position and activity tracking, and neuromodulation technology solutions; and Masimo Hospital Automation platform, including hospital automation solutions, including Patient SafetyNet, Patient SafetyNet Surveillance, SafetyNet, Replica, Iris, MyView, UniView, Uniview: 60, Masimo Sleep, Centroid, and Bridg; and nasal high-flow ventilation, neuromodulation therapeutics, and telehealth solutions. In addition, the company provides its products through direct sales force, distributors, and original equipment manufacturers partners to hospitals, emergency medical service and home care providers, long-term care facilities, physician offices, veterinarians, and consumers; and home wellness products through e-commerce internet sites, such as masimopersonalhealth.com, amazon.com, and shopify.com. Masimo Corporation was incorporated in 1989 and is headquartered in Irvine, California.