Needham maintains Buy rating on GKOS shares, sees growth acceleration By Investing.com

On Tuesday, Needham reaffirmed its Buy rating on shares of Glaukos Corporation (NYSE:) with a steady price target of $149.00. The firm’s positive stance comes after Glaukos reported third-quarter revenue that exceeded market expectations, leading to an upward revision of its financial guidance.

The company’s iDose product, which is designed to treat glaucoma, saw its revenue double from the previous quarter, reaching approximately $9 million.

Glaukos has updated its financial outlook, attributing the improved forecast to the strong performance seen in the third quarter. Analysts from Needham believe that fourth-quarter sales will continue this upward trajectory, estimating that iDose will contribute sales in the low-double digits. This product is anticipated to be a significant growth driver for Glaukos, with expectations set for a continued increase in sales.

The company’s management has indicated that the increasing adoption of iDose is likely to lead to an acceleration in overall growth into 2025. This projection is based on the positive feedback and results seen so far with the iDose product. Needham’s analysts, after conducting their own checks, concur with this assessment and foresee a sustained ramp-up in iDose sales.

In summary, Needham’s maintained Buy rating reflects a confidence in Glaukos’ growth prospects, particularly with the iDose product. The firm’s analysts expect that the revenue growth seen in the third quarter will not only persist but will also accelerate into the next year, contributing to the company’s overall financial performance.

In other recent news, Glaukos Corporation reported a 23.9% year-over-year growth in its third-quarter revenue, reaching $96.7 million, primarily driven by strong sales from its iDose and iStent products. The company has raised its full-year revenue guidance to between $377 million and $379 million.

Despite these positive results, Glaukos maintains a conservative outlook for the fourth quarter due to potential challenges. Analyst firms BTIG and Jefferies have reiterated their Buy ratings on Glaukos, with BTIG increasing its price target to $140 and Jefferies to $155, both highlighting the potential growth of the iDose product.

Glaukos also announced successful results from its second Phase 3 trial for Epioxa, a non-invasive drug therapy for keratoconus treatment. The trial met its primary efficacy endpoint, demonstrating a significant improvement in corneal curvature.

In addition, the company reported a 19% increase in second quarter consolidated net sales, leading to an upward revision of its full-year 2024 net sales guidance to between $370 and $376 million.

On the financial front, Glaukos announced the redemption of its outstanding 2.75% Convertible Senior Notes due 2027, with a principal amount of $57.5 million. Other analyst firms, including Truist Securities and Piper Sandler, have also maintained positive ratings on Glaukos, emphasizing the potential growth from its iDose product and the positive results from its Epioxa trial.

InvestingPro Insights

Glaukos Corporation’s recent performance aligns with several key insights from InvestingPro. The company’s strong revenue growth is reflected in the data, showing a 15.14% increase in the last twelve months as of Q2 2024, with an even more impressive 19.02% quarterly growth. This supports Needham’s positive outlook and the company’s upward revision of financial guidance.

InvestingPro Tips highlight that Glaukos has seen a “High return over the last year” and is “Trading near 52-week high,” which corroborates the market’s positive reception of the company’s performance, particularly with the success of the iDose product. The stock’s 104.61% price total return over the past year underscores this strong performance.

Despite these positive indicators, it’s worth noting that Glaukos “Operates with a moderate level of debt” and is “Not profitable over the last twelve months.” This suggests that while revenue growth is strong, the company is still focusing on expansion and market penetration, which aligns with the expectations for continued growth into 2025.

For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Glaukos, providing a deeper understanding of the company’s financial health and market position.

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