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On Thursday, BTIG analyst Ryan Zimmerman revised the price target for RxSight Inc. (NASDAQ: RXST) shares to $28, down from the previous $28, while maintaining a Buy rating on the stock. According to InvestingPro data, the stock is currently trading near its 52-week low, having declined over 45% in the past six months, though the company maintains a GREAT financial health score. The adjustment follows RxSight’s preliminary revenue announcement for the first quarter of 2025, which fell short of consensus estimates. RxSight reported revenues of $37.9 million, a 28% year-over-year increase, but approximately 4.7% below the expected $39.8 million. This comes despite the company’s impressive 57% revenue growth over the last twelve months, as revealed in InvestingPro’s detailed financial analysis.
During a subsequent call, management discussed various factors contributing to the lower-than-anticipated results. These included a weakened premium Intraocular Lens (IOL) market, the introduction of competitive products, growing economic concerns, and a slower rate of new customer adoption. Although these factors are considered transitory, they have left investors without a clear timeline for RxSight’s recovery.
Management assured analysts that the company’s guidance has been sufficiently reset to reflect current expectations. However, BTIG believes that RxSight will need to demonstrate improved performance against this revised guidance to regain investor confidence. Despite the challenges, BTIG’s follow-up with management highlighted continued steady demand for RxSight’s technology and the importance of premium IOLs as a key revenue source in ophthalmology.
In light of the updated expectations and market conditions, BTIG has adjusted its model for RxSight. The firm maintains that RxSight has the potential to grow at a 26% compound annual growth rate (CAGR) over the next three years. Additionally, with shares trading at approximately 2.1 times the next twelve months’ (NTM) enterprise value to sales (EV/Sales), which is around three times lower than peers with an 18% growth rate on a three-year CAGR, BTIG continues to support its Buy rating for the stock. InvestingPro’s comprehensive analysis shows the company maintains a strong liquidity position with a current ratio of 11.36, while analyst targets range from $22 to $56, suggesting significant potential upside. Get access to the full RxSight Pro Research Report and 12+ additional ProTips with an InvestingPro subscription.
In other recent news, RxSight Inc. reported a 28% year-over-year increase in revenue for Q1 2025, amounting to $37.9 million. Despite this growth, the company revised its full-year revenue guidance downward to a range of $160-175 million, citing macroeconomic challenges and competitive pressures. The company also achieved European regulatory approval for its key products, which could support future market expansion. Notably, RxSight sold 73 Light Delivery Devices (LDDs), marking an 11% increase from the previous year, and 27,579 Light Adjustable Lenses (LALs), a 36% increase year-over-year. The LDD installed base grew by 43% to 1,044 units. The company continues to focus on expanding its presence in the European market, despite economic headwinds. Additionally, RxSight’s gross margin guidance remains at 71-73%, and operating expenses have been adjusted to $150-160 million. The company’s leadership remains optimistic about long-term growth prospects, particularly in Europe, despite the current challenges.
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