Glaukos Corporation (GKOS Quick QuoteGKOS - Free Report) is well-poised for growth in the coming quarters, courtesy of its favorable clinical-trial results. Solid performance in the third quarter of 2022 and continued strength in its flagship iStent also buoy optimism. Headwinds resulting from stiff competition and vendor uncertainty are major downsides.

Over the past year, the Zacks Rank #3 (Hold) stock has lost 11.3% compared with the 30.2% decline of the industry and 21.6% fall of the S&P 500.

The renowned ophthalmic medical technology and pharmaceutical company has a market capitalization of $1.95 billion. Glaukos projects 11.2% growth for 2023 and expects to witness continued improvements in its business.

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Let’s delve deeper.

Favorable Clinical-Trial Results: We are optimistic about Glaukos’ progress on the clinical-trial front. In September, the company announced positive top-line data for both Phase Three pivotal trials of iDose TR that successfully achieved its pre-specified primary efficacy endpoints through three months in both Phase Three trials and demonstrated excellent tolerability and a favorable safety profile through 12 months.

Continued Strength in iStent: We are upbeat about Glaukos’ flagship iStent, the first FDA-approved surgical device available for insertion in conjunction with cataract surgery. In August, the company announced that it had received 510(k) clearance from the FDA for the iStent infinite Trabecular Micro-Bypass System indicated for use in a standalone procedure to reduce elevated intraocular pressure in patients with primary open-angle glaucoma uncontrolled by prior medical and surgical therapy.

Per Glaukos’ third-quarter earnings call in November, the company has already commenced the U.S. initial commercial launch activities for iStent infinite, its novel 3-stent injectable system.

Strong Q3 Results: Glaukos’ better-than-expected third-quarter 2022 results buoy optimism. The company recorded solid sales of Glaucoma and Corneal Health products during the quarter. Management’s confirmation about the continued solid execution of its strategies and the resiliency of its U.S. combo-cataract franchise in the face of the reimbursement headwinds looks promising.

Downsides

Stiff Competition: Glaukos’ competitors include medical companies, academic and research institutions or others that develop new drugs, therapies, medical devices or surgical procedures to treat glaucoma. The company has many competitors, including divisions of larger companies with greater resources and recognition and smaller companies competing against specific products or in certain geographies.

Vendor Uncertainty: Glaukos currently relies on a limited number of third-party suppliers, in some cases sole suppliers, to supply components for the iStent, the iStent inject models and other pipeline products. If any one or more of these suppliers cease to provide the company with sufficient quantities of components or drugs in a timely manner or on acceptable terms, the company would have to seek alternative sources of supply.

Estimate Trend

Glaukos has been witnessing a positive estimate revision trend for 2022. Over the past 90 days, the Zacks Consensus Estimate for its loss per share has narrowed from $2.26 to $2.23.

The Zacks Consensus Estimate for fourth-quarter 2022 revenues is pegged at $68.1 million, suggesting a 7.1% decline from the year-ago reported number.

This compares to our fourth-quarter 2022 revenue estimate of $67.2 million, suggesting an 8.2% fall from the year-ago quarter’s reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Exact Sciences Corporation (EXAS Quick QuoteEXAS - Free Report) , ShockWave Medical, Inc. (SWAV Quick QuoteSWAV - Free Report) and Merit Medical Systems, Inc. (MMSI Quick QuoteMMSI - Free Report) .

Exact Sciences, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 27.5%. EXAS’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in one, the average beat being 0.6%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Exact Sciences has lost 32.2% compared with the industry’s 24.2% decline in the past year.

ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 22.2% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.

ShockWave Medical has gained 17.9% against the industry’s 30.2% decline over the past year.

Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.

Merit Medical has gained 9.5% against the industry’s 12.5% decline over the past year.