Back to top

Image: Bigstock

Here's Why You Should Hold on to Glaukos (GKOS) Stock Now

Read MoreHide Full Article

Glaukos Corporation (GKOS - Free Report) is well-poised for growth backed by strength in iStent technology and a robust product portfolio. However, stiff competition remains a concern.

Shares of this Zacks Rank #3 (Hold) have lost 4.7% against the industry’s growth of 7% in the past three months. The S&P 500 Index has rallied 11.1% in the same time frame.

Glaukos — with a market capitalization of $2.15 billion — is a leading ophthalmic medical technology and pharmaceutical company. It projects growth of 13.9% for 2021 and expects to maintain its strong performance. The company has a trailing four-quarter earnings surprise of 48.8%, on average.

Key Catalysts

Glaukos’ flagship iStent is the first FDA-approved surgical device available for insertion in conjunction with cataract surgery. This results in a reduction of intraocular pressure in adult patients with mild-to-moderate open-angle glaucoma.

During the third quarter of 2021, the company achieved a market-leading clinical milestone that surpassed 200 peer-reviewed publications on its iStent technologies. This reflects the most solid, diverse and longest-term body of clinical evidence for any mix technology.

Management at Glaukos continues to remain optimistic about the prospects in the iStent platform worldwide, including the emerging economies. The company advanced the U.S. commercial rollout of the iStent inject W, which offers the same safety and efficacy of iStent inject but with added benefits during the first quarter of 2021. During the same time, Glaukos advanced the commercial rollout of iStent inject W in key international markets like Australia, Japan and several European countries.

Zacks Investment ResearchImage Source: Zacks Investment Research

The product has received standalone indication approval in Australia and regulatory approval in India. It has been registering sustained progress across several of the key market access initiatives.

The company anticipates a robust pipeline of new product launches to substantially expand its market opportunities. With the targeted launches of iStent infinite in late 2021, and promising longer-term programs of iStent SA, iDose TREX, iDose Rock and the IOP Sensor program, Glaukos believes that it is positioned well to drive sustainable long-term growth in its glaucoma franchise in the near future.

Factor Hurting the Stock

Glaukos’ competitors include medical companies, academic and research institutions or others that develop new drugs, therapies, medical devices or surgical procedures to treat glaucoma. Consequently, intense competition continues to weigh on the company’s overall performance.

Estimates Trend

For 2021, the consensus mark for loss has narrowed to 91 cents from the previous year’s loss of $1.15.

The consensus mark for 2021 revenues is pegged at $288.1 million, suggesting growth of 28.1% from the year-ago reported number.

Stocks to Consider

Some better-ranked stocks in the broader medical space include Thermo Fisher Scientific Inc. (TMO - Free Report) , McKesson Corporation (MCK - Free Report) and NextGen Healthcare, Inc. (NXGN - Free Report) .

Thermo Fisher surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.02%. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher’s long-term earnings growth rate is estimated at 14%. The company’s earnings yield of 3.7% compares favorably with the industry’s (3.6%).

McKesson beat earnings estimates in each of the trailing four quarters, the average surprise being 19.9%. The company currently carries a Zacks Rank #2.

McKesson’s long-term earnings growth rate is estimated at 8.9%. The company’s earnings yield of 9.9% compares favorably with the industry’s 3.2%.

NextGen Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 16%. The company currently carries a Zacks Rank of 2.

NextGen Healthcare’s long-term earnings growth rate is estimated at 8.5%. The company’s earnings yield of 5.9% compares favorably with the industry’s (4.1%).