Street Calls of the Week
On Friday, BTIG analyst Ryan Zimmerman adjusted the price target on Glaukos Corporation (NYSE:GKOS) shares to $155, a slight decrease from the previous target of $157, while maintaining a Buy rating. The revision follows the company’s fourth-quarter financial performance for the fiscal year 2024. According to InvestingPro data, GKOS has delivered an impressive 69.6% return over the past year and is currently trading near its 52-week high of $163.71, though analysis suggests the stock may be trading above its Fair Value.
Glaukos reported fourth-quarter revenue of $105.5 million, marking a 28.1% year-over-year increase and slightly surpassing BTIG and consensus estimates of $100.3 million and $100.7 million, respectively. The company’s glaucoma revenue reached $84.1 million, a 38.9% increase from the previous year, exceeding BTIG’s estimate of $77.8 million. This growth was partly attributed to the approximately $15.5 million contribution from iDose and a 5.2% growth in the U.S. market for its iStent infinite and other iStent products. The company maintains a strong gross profit margin of 75.5% and healthy liquidity with a current ratio of 5.99, as reported by InvestingPro, which offers 8 additional key insights about GKOS’s financial health.
Despite the strong glaucoma revenue, the company’s Corneal Health revenue fell short of BTIG’s $22.6 million estimate, coming in at $21.4 million, a 1.8% year-over-year decline. Glaukos provided a fiscal year 2025 guidance range of $475 million to $485 million, representing a 24% to 26% growth, which is in line with street expectations. However, the guidance reflects challenges such as pressure on U.S. legacy glaucoma products from Local Coverage Determinations (LCDs) and a lost royalty, leading to a flat to low single-digit decline. The company’s overall revenue growth has been robust at 21.85% over the last twelve months, though InvestingPro analysis indicates the company is not yet profitable, with detailed insights available in the comprehensive Pro Research Report.
Outside the U.S., glaucoma revenue is impacted by foreign exchange rates, competition, and a French government policy change, resulting in high single-digit growth, a decrease from the 20%+ growth in fiscal year 2024. The Medicaid Drug Rebate Program is anticipated to push Corneal Health to low single-digit growth.
The analyst noted that iDose is expected to play a larger role in supporting Glaukos’ growth, with projections for iDose revenue in fiscal year 2025 increased to approximately $117 million, up from $30.3 million in fiscal year 2024. While the reliance on iDose introduces increased risk for the fiscal year 2025, Zimmerman does not believe these challenges fundamentally undermine the investment thesis for Glaukos but has adjusted the valuation to reflect these concerns.
In other recent news, Glaukos Corporation reported its Q4 2024 earnings, showing a mixed financial performance. The company achieved a revenue of $105.5 million, surpassing analysts’ expectations of $100.53 million. However, the earnings per share (EPS) fell short at -$0.40, compared to the anticipated -$0.38. Despite the revenue growth, the EPS miss contributed to a negative market reaction. Glaukos ended the year with no debt and $324 million in cash and equivalents, projecting net sales between $475 million and $485 million for 2025. The company plans to launch several innovative products, including the iDose Trio in 2026, and expand its international infrastructure. Additionally, Glaukos announced a new facility and several product innovations, emphasizing its commitment to pioneering new marketplaces within ophthalmology. The company’s forward guidance reflects optimism about product innovation and market expansion.
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