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Investing.com - Jefferies downgraded RxSight Inc. (NASDAQ:RXST) from Buy to Hold on Thursday, while significantly reducing its price target to $9.00 from $24.00. The stock has already declined about 39% in the past week, with the current price of $7.95 representing an 84% drop from its 52-week high of $58.23.
The downgrade marks the second consecutive quarter that RxSight has missed expectations and lowered guidance, according to Jefferies.
The firm cited elongated LDD capital selling cycles as a key factor in the downgrade, noting that new customers are taking longer to ramp up operations than previously anticipated.
Jefferies also pointed out that utilization rates among existing RxSight customers have flattened, creating additional headwinds for the company’s growth trajectory.
While RxSight management has initiated a new commercial strategy to improve utilization and growth, Jefferies expressed uncertainty about both the pace of potential recovery and the timing of any growth inflection.
In other recent news, RxSight announced preliminary second-quarter revenue of approximately $33.6 million, marking a 4% decline compared to the same period last year. The company has significantly revised its 2025 revenue guidance downward to a range of $120 million to $130 million, a substantial decrease from the previous estimate of $160 million to $175 million. This adjustment reflects a potential year-over-year decline of 7% to 14%. The reduced guidance is attributed to weak sales of Light Delivery Devices, which fell 49% year-over-year. Despite these challenges, RxSight raised its gross margin guidance to 72-74% and reduced its operating expense forecast to $145-155 million.
Analysts have reacted to these developments with mixed ratings. BTIG downgraded RxSight from Buy to Neutral, citing sales challenges and competitive pressures in the premium intraocular lens segment. Wells Fargo (NYSE:WFC) also downgraded the company from Overweight to Equal Weight, highlighting structural issues and reduced visibility beyond 2025. Meanwhile, Needham maintained a Buy rating, expressing optimism about potential growth catalysts and international expansion. These recent developments have created a complex landscape for RxSight as it navigates competitive pressures and adjusts its commercial strategies.
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