Masimo Corporation (MASI) saw its stock price plummet 7.02% in after-hours trading on Tuesday, following the announcement of the sale of its consumer audio business and the release of its first-quarter 2025 earnings report. The medical technology company revealed plans to sell its Sound United division to Harman International for $350 million, a move that comes after reported investor outrage over the audio business acquisition.

In its Q1 2025 results, Masimo reported revenue of $372 million, slightly above the IBES estimate of $367.5 million. The company's non-GAAP earnings per diluted share from continuing operations came in at $1.36. Looking ahead, Masimo provided its 2025 outlook, projecting non-GAAP revenue from continuing operations between $1,500 million and $1,530 million, and non-GAAP earnings per diluted share from continuing operations in the range of $5.30 to $5.60, excluding the impact of new tariffs.

The sharp decline in Masimo's stock price suggests that investors may be concerned about the company's strategic direction and financial outlook. The decision to divest the consumer audio business, which was acquired amid controversy, could be seen as an admission of a strategic misstep. Additionally, while the Q1 results beat expectations, the 2025 guidance may not have met investor expectations for growth, particularly in light of the audio business sale. The market's reaction indicates that shareholders are reassessing Masimo's value proposition and future growth prospects in its core medical technology business.