12:14 PM EDT, 09/20/2024 (MT Newswires) -- A new Masimo ( MASI ) management team that shareholder Politan Capital Management would likely install if it gets control of the company's board might uncover additional challenging issues, Needham said in a note Friday.

Politan, which said Thursday that it had won two more Masimo ( MASI ) board seats at the company's annual meeting, is expected to appoint an interim chief executive if current CEO Joe Kiani and Chief Operating Officer Bilal Muhsin resign, the investment firm said.

"While we believe that Politan is likely to create value at MASI over time, we are concerned that there could be some challenges in the shorter-term," Needham said.

The activist shareholder has pushed for a strategic review of Masimo ( MASI ), including a proposed separation of its consumer business, and previously expressed "serious concerns" over the lack of governance and oversight in the board.

Needham said a new management team "might uncover other issues at MASI that require time and effort to resolve," and that a sale of the consumer audio business "might prove dilutive to MASI's [earnings per share], depending on the valuation."

The firm maintained its hold rating on the stock.

Shares of Masimo ( MASI ) were more than 3% higher in recent trading.

Price: 115.20, Change: +3.47, Percent Change: +3.11