BofA update shows where active managers are putting money
When InvestingPro’s Fair Value models flagged Glaukos Corporation (NYSE:GKOS) as significantly overvalued in February 2025, the healthcare company’s stock was trading at $156.44. Six months later, this bearish call has proven remarkably accurate, with shares now trading at $88.00, representing a 41% decline that validated the model’s assessment.
Glaukos, a medical technology company specializing in innovative therapies for glaucoma, corneal disorders, and retinal diseases, showed several warning signs that InvestingPro’s comprehensive analysis captured. At the time of the overvaluation alert, the company was generating $383.48 million in revenue with negative EBITDA of $72.49 million and concerning earnings per share of -$2.77.
The Fair Value model’s sophisticated analysis indicated a significant downside potential of 34.78%, suggesting the stock was trading well above its intrinsic value. This assessment proved prescient as multiple developments subsequently confirmed the overvaluation thesis. For investors seeking similar opportunities, current overvalued stocks can be found on the Most overvalued list.
The stock’s decline was accompanied by several validating events, including multiple analyst downgrades. JPMorgan cut its price target from $160 to $100, while Piper Sandler and Stifel also reduced their targets. Recent quarterly results showed revenue beats overshadowed by guidance concerns, leading to further stock pressure. Notable insider activity, including sales by the CFO and a director, added to the bearish signals.
Current fundamentals show marginal improvement, with revenue increasing to $432.95 million and EBITDA losses narrowing to $62.16 million, but these changes weren’t sufficient to justify the previous elevated valuation. The company’s financial health relative score of 1.12 suggests ongoing challenges despite operational improvements.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, comparable company metrics, and market sentiment indicators. This comprehensive approach helps identify pricing inefficiencies before they become apparent to the broader market, as demonstrated in this case with Glaukos.
For investors looking to access similar market-beating insights, InvestingPro offers a suite of advanced tools and analysis capabilities. Beyond Fair Value indicators, subscribers gain access to real-time alerts, comprehensive financial analysis, and exclusive ProTips that can help identify both overvalued and undervalued opportunities. Learn more about InvestingPro to start making more informed investment decisions based on data-driven analysis.