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On Thursday, Stifel analysts revised their price target for Sight Sciences Inc. (NASDAQ:SGHT) stock, reducing it to $4.00 from the prior target of $5.00. Despite this change, they have upheld a Buy rating on the company’s shares. The adjustment comes after Sight Sciences reported fourth-quarter revenue for 2024 that did not meet the expectations set before the J.P. Morgan Healthcare Conference, with figures coming in at $19.1 million compared to the anticipated $21.2 million by Stifel and $20.4 million by the broader market. Currently trading at $2.34, the stock has fallen 33.5% year-to-date and is trading near its 52-week low of $2.29. According to InvestingPro analysis, the stock appears undervalued at current levels, with analyst targets ranging from $3 to $5.
The lower-than-expected revenue was attributed to significant challenges in the Surgical Glaucoma segment, which were amplified by the Medicare Local Coverage Determinations (LCDs) changes implemented in mid-November. These headwinds are predicted to continue throughout the year, leading to a 2025 revenue forecast of $70 million to $75 million, which falls below Stifel’s latest projection of $75 million. The guidance suggests a year-over-year decline in Surgical Glaucoma revenues ranging from 3% to 9%. Despite these challenges, InvestingPro data shows the company maintains strong liquidity with a current ratio of 9.04 and holds more cash than debt on its balance sheet.
Stifel’s analysts have conducted their own market research earlier in the year, which indicated a shrinking market for Minimally Invasive Glaucoma Surgery (MIGS) in 2025. Although Sight Sciences’ OMNI product was losing market share according to their checks, analysts believe that the company’s guidance has been conservative, especially regarding market challenges, competitive dynamics, and potential revenue from TearCare payer approvals.
The rationale behind maintaining a Buy rating for Sight Sciences is largely based on the optimism surrounding potential reimbursement for TearCare, including catalysts from payers expected in 2025. Additionally, the analysts anticipate that the impact of LCD changes will have been fully realized by the end of 2025, and they see an untapped market opportunity for standalone MIGS products. They also note that Sight Sciences has a strong balance sheet to support its operations moving forward. With a market capitalization of $122 million and gross profit margins of 85.5%, the company shows operational efficiency despite current challenges. For deeper insights into Sight Sciences’ financial health and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company’s competitive position and growth prospects.
In other recent news, Sight Sciences Inc. reported its fourth-quarter 2024 earnings, which fell slightly below analysts’ expectations. The company posted an earnings per share (EPS) of -$0.23, just missing the forecasted -$0.22, and recorded revenue of $19.1 million, which was under the expected $20.26 million. Despite a 2% year-over-year revenue increase and a 9% growth in surgical glaucoma revenue, the dry eye segment experienced a significant decline. The company’s gross margin improved to 87% from 85% the previous year, even as the net loss widened to $11.8 million. Looking ahead, Sight Sciences provided 2025 revenue guidance of $70 million to $75 million, anticipating reimbursement decisions for its TearCare product. Analysts from UBS and Stifel raised questions about the impact of Medicare LCD restrictions on the company’s procedures and future market strategies. Sight Sciences remains optimistic about its strategic initiatives, emphasizing growth in both the glaucoma and dry eye markets.
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