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On Tuesday, Piper Sandler adjusted its price target for Glaukos Corporation (NYSE:GKOS) shares, reducing it to $165 from the previous $180, while maintaining an Overweight rating on the stock. Currently trading at $92.91 with a market capitalization of $5.25 billion, the new price target reflects a more cautious outlook following the company’s recent performance.
Glaukos shares have seen a significant decline, dropping over 40% since the company reported its fourth-quarter earnings for 2024. This contrasts with the roughly 12% decline experienced by the S&P 500 during the same period. Analysts attribute the sharp fall in Glaukos’ stock price to the Q4 results of iDose, a key product that slightly missed the high expectations set by market analysts.
Despite the recent downturn, Piper Sandler remains optimistic about the company’s prospects. The firm anticipates that iDose will provide substantial growth for Glaukos in the fiscal year 2025 and beyond, contributing to increased shareholder value. Supporting this outlook, InvestingPro data shows impressive revenue growth of 21.85% and strong gross margins of 75.48%. The analyst highlighted that the recent sell-off in Glaukos’ shares might have been an overreaction to the iDose launch’s performance.
Moreover, Piper Sandler points out that Glaukos has a range of other product catalysts on the horizon that could positively impact the company’s performance in the short to medium term. These potential developments are seemingly overlooked by some investors, according to the firm.
In addition to the product pipeline, Piper Sandler believes that Glaukos has significant earnings power yet to be realized in the coming years. This potential for growth underpins the firm’s decision to reiterate its Overweight rating on the stock, despite the reduction in the price target. The adjusted target of $165, down from $180, takes into account the recent market response and the near-term expectations for iDose.
In other recent news, Glaukos Corporation reported its fourth-quarter 2024 earnings, showing a revenue increase of 28% year-over-year, reaching $105.5 million and surpassing forecasts of $100.53 million. However, the company reported an earnings per share (EPS) of -$0.40, missing the expected -$0.38. The U.S. Food and Drug Administration (FDA) has set a review date for Glaukos’ keratoconus drug Epioxa, with a decision expected by October 2025. Analysts from Stifel and Truist Securities maintained their Buy ratings on Glaukos, with price targets of $175 and $185, respectively, reflecting confidence in the company’s iDose product despite recent financial performance challenges.
BTIG adjusted its price target for Glaukos to $155 from $157, while maintaining a Buy rating, following the company’s fourth-quarter financial performance. Glaukos provided a fiscal year 2025 guidance range of $475 million to $485 million, indicating a projected growth of 24% to 26%. The company’s iDose product saw a significant quarter-over-quarter revenue increase, doubling from $13 million to $16 million, supporting a revenue acceleration thesis. Glaukos ended 2024 with no debt and $324 million in cash and equivalents, underscoring its strong financial position despite the EPS miss. The company continues to focus on overcoming reimbursement challenges and expanding its market presence with innovative ophthalmic treatments.
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