RxSight stock rating downgraded by Wells Fargo amid sales concerns

Investing.com - Wells Fargo (NYSE:WFC) downgraded RxSight Inc. (NASDAQ:RXST) from Overweight to Equal Weight on Wednesday, while significantly reducing its price target to $9.00 from $25.00. According to InvestingPro data, the stock has declined over 77% in the past year and is currently trading near its 52-week low of $12.38.

The downgrade follows RxSight’s second-quarter performance, which missed Street expectations by 16% as Light Adjustable Lens (LAL) trends deteriorated throughout the quarter, creating uncertainty about second-half trends.

Wells Fargo cited the company’s fiscal year 2025 guidance cut of 25% and limited visibility beyond 2025 as additional factors behind the rating change.

The bank also pointed to structural issues affecting RxSight, including workflow challenges, decreasing utilization in established cohorts, and saturation of the surgeon base, which may require extended time to resolve.

Despite the downgrade, Wells Fargo expressed continued belief in RxSight’s technology and maintained cautious optimism about the company’s international expansion opportunities.

In other recent news, RxSight has announced significant changes to its financial outlook and reported mixed performance in its latest quarterly results. The company has revised its full-year 2025 revenue guidance downward to between $120 million and $130 million, a notable decrease from the previous forecast of $160 million to $175 million. This adjustment follows a disappointing second quarter, where revenue fell to approximately $33.6 million, marking a 4% decrease from the previous year. Despite these challenges, RxSight has raised its gross margin guidance to 72-74% and reduced its operating expense forecast to $145-155 million.

In an earnings call, the company reported a first-quarter 2025 earnings per share (EPS) of -$0.03, which exceeded the forecasted EPS of -$0.20, although revenue slightly missed expectations at $37.9 million. Analyst firm Wells Fargo has upgraded RxSight’s stock rating from Equal Weight to Overweight, citing the company’s significant lead in the market for light adjustable lenses. Meanwhile, Stifel has maintained its Hold rating on the stock, noting a shift in surgeon sentiment regarding the company’s Light Adjustable Lens technology.

RxSight’s Light Delivery Device sales have shown a concerning decline, with only 40 units sold in the second quarter, down 49% from the previous year. The company plans to focus on supporting customer success within new and existing practices to address these challenges. Despite the revenue setbacks, RxSight’s cash, cash equivalents, and short-term investments were reported at $227.5 million as of June 30, 2025.

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