Is Masimo Corp. overvalued or undervalued?

As of 25 February 2025, the valuation grade for Masimo Corp. has moved from very expensive to risky. The company is currently assessed as overvalued. Key ratios include a P/E ratio of 409, an EV to EBITDA of 73.89, and a Price to Book Value of 12.86, all of which indicate significant overvaluation compared to industry norms.
In comparison to peers, Masimo Corp. has a P/E ratio that is substantially higher than Natera, Inc. at -120.56 and Shockwave Medical, Inc. at 75.84, both of which are also classified as risky or very expensive. Notably, Masimo's ROCE stands at 5.74% and ROE at 3.14%, which further supports the conclusion of overvaluation given the low returns relative to its high market price. Despite a recent positive stock performance against the S&P 500, the overall financial metrics suggest that Masimo Corp. is not a sound investment at its current valuation.