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Piper Sandler has reiterated its Neutral rating and $16.00 price target on STAAR Surgical (NASDAQ:STAA), citing ongoing challenges in the company’s China business and recent management turnover. According to InvestingPro data, the stock has seen a dramatic -59.67% decline over the past year, with analysts projecting an 18% revenue decline for the current year.
The research firm noted STAAR Surgical shares have declined 32% year-to-date, significantly underperforming the S&P 500’s 2% gain, following what it described as a "collapse" in the company’s China business during the fourth quarter of 2023, which led to both CEO and CFO changes.
While Piper Sandler expressed appreciation for STAAR’s implantable collamer lens ( ICL (TASE:ICL)) technology and its value proposition, the firm remains cautious about recommending the stock given current uncertainties in the China segment, which represents approximately 50% of the company’s revenue.
STAAR faces new competition in the Chinese market but plans to launch its Evo+ (V5) lens in China this summer, according to the research note. The company’s new management team is focusing on cost reduction and cash flow improvement initiatives.
Despite STAAR Surgical not appearing expensive from a valuation perspective, Piper Sandler maintained its Neutral stance, expressing concern that some cost-cutting measures might potentially impact top-line growth and citing "moving pieces associated with the story at present."
In other recent news, STAAR Surgical reported first-quarter 2025 revenue of $42.6 million, exceeding the anticipated $40.33 million. However, the company faced a significant earnings per share (EPS) shortfall, reporting -$1.10 against a forecast of -$0.58. This discrepancy was largely due to a steep decline in China sales, which dropped to $389,000 from $38.5 million the previous year. Despite these challenges, STAAR Surgical announced a share repurchase program, authorizing up to $30 million in stock buybacks, which reflects management’s confidence in the company’s growth prospects. Jefferies raised its price target for STAAR Surgical to $21, maintaining a Hold rating, following the company’s positive revenue performance. Similarly, Canaccord Genuity increased its price target to $20, also maintaining a Hold rating, while Stifel reaffirmed a Buy rating with a $20 price target, citing confidence in the company’s strategic planning despite the withdrawal of future guidance. The company is also focusing on strategic cost-cutting measures and expanding its manufacturing capabilities in Switzerland to address tariff challenges.
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