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Glaukos (GKOS) Hits 52-Week High: What's Driving the Stock?
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Shares of Glaukos Corporation (GKOS - Free Report) scaled a new 52-week high of $94.24 on Jan 29, before closing the session marginally lower at $94.17.
Over the past year, this Zacks Rank #3 (Hold) stock has surged 91.9% compared with the 3.4% rise of the industry and the S&P 500’s 21.5% growth.
The company’s expected growth rate of 8.6% for 2024 compares with the industry’s growth projection of 19.5%. Glaukos’ earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.7%.
Glaukos is witnessing an upward trend in its stock price, prompted by its strength in its flagship iStent. The optimism led by a solid third-quarter 2023 performance and robust business performances are expected to contribute further. However, vendor uncertainty and pipeline setbacks continue to concern the company.
Image Source: Zacks Investment Research
Let’s delve deeper.
Key Growth Drivers
Strength in iStent: Investors are optimistic about Glaukos’ prospects with respect to its iStent. The company advanced the commercial rollout of iStent inject W during the first quarter of 2022 in key international markets, including Australia, Japan and several European countries. The product has received stand-alone indication approval in Australia and regulatory approval in India, along with registering continued progress across many of the key market access initiatives. New local coverage determinations proposed in June 2023 are likely to remove certain ophthalmic goniotomy and canaloplasty procedures from coverage that will likely have a positive impact on the iStent business.
Robust Business Performances: Investors are optimistic about Glaukos’ sales, which returned to growth following the declining trend in 2022. This reflected an improving macro environment coupled with the launches of several new products in the past few quarters. Continued strong demand across international glaucoma and Corneal Health franchises will be key topline drivers in the rest of 2023. Moreover, the commercial launch of iStent infinite earlier in 2023 is boosting the U.S. glaucoma franchise, which will drive growth in the upcoming few quarters.
Strong Q3 Results: Glaukos’ robust third-quarter 2023 results raise investors’ optimism. The company registered solid year-over-year top-line and segmental performances.
Downsides
Pipeline Setbacks: Although Glaukos has a promising pipeline, it has faced setbacks with clinical development or regulatory activities. Any potential clinical or regulatory setbacks can lead to an adverse impact on the company’s share price, thereby hurting investors’ wealth. The FDA denied approval to a pre-market approval application for ab-externo device for glaucoma, MicroShunt. The company is currently evaluating alternate regulatory pathways for approval, and commercial launch in the United States remains uncertain.
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.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 31.5% compared with the industry’s 5.6% rise in the past year.
Merit Medical, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 14.4%.
Merit Medical has gained 12.5% compared with the industry’s 8.9% rise in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 54.8% compared with the industry’s 3.4% rise in the past year.
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Glaukos (GKOS) Hits 52-Week High: What's Driving the Stock?
Shares of Glaukos Corporation (GKOS - Free Report) scaled a new 52-week high of $94.24 on Jan 29, before closing the session marginally lower at $94.17.
Over the past year, this Zacks Rank #3 (Hold) stock has surged 91.9% compared with the 3.4% rise of the industry and the S&P 500’s 21.5% growth.
The company’s expected growth rate of 8.6% for 2024 compares with the industry’s growth projection of 19.5%. Glaukos’ earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.7%.
Glaukos is witnessing an upward trend in its stock price, prompted by its strength in its flagship iStent. The optimism led by a solid third-quarter 2023 performance and robust business performances are expected to contribute further. However, vendor uncertainty and pipeline setbacks continue to concern the company.
Image Source: Zacks Investment Research
Let’s delve deeper.
Key Growth Drivers
Strength in iStent: Investors are optimistic about Glaukos’ prospects with respect to its iStent. The company advanced the commercial rollout of iStent inject W during the first quarter of 2022 in key international markets, including Australia, Japan and several European countries. The product has received stand-alone indication approval in Australia and regulatory approval in India, along with registering continued progress across many of the key market access initiatives. New local coverage determinations proposed in June 2023 are likely to remove certain ophthalmic goniotomy and canaloplasty procedures from coverage that will likely have a positive impact on the iStent business.
Robust Business Performances: Investors are optimistic about Glaukos’ sales, which returned to growth following the declining trend in 2022. This reflected an improving macro environment coupled with the launches of several new products in the past few quarters. Continued strong demand across international glaucoma and Corneal Health franchises will be key topline drivers in the rest of 2023. Moreover, the commercial launch of iStent infinite earlier in 2023 is boosting the U.S. glaucoma franchise, which will drive growth in the upcoming few quarters.
Strong Q3 Results: Glaukos’ robust third-quarter 2023 results raise investors’ optimism. The company registered solid year-over-year top-line and segmental performances.
Downsides
Pipeline Setbacks: Although Glaukos has a promising pipeline, it has faced setbacks with clinical development or regulatory activities. Any potential clinical or regulatory setbacks can lead to an adverse impact on the company’s share price, thereby hurting investors’ wealth. The FDA denied approval to a pre-market approval application for ab-externo device for glaucoma, MicroShunt. The company is currently evaluating alternate regulatory pathways for approval, and commercial launch in the United States remains uncertain.
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.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 31.5% compared with the industry’s 5.6% rise in the past year.
Merit Medical, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 14.4%.
Merit Medical has gained 12.5% compared with the industry’s 8.9% rise in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 54.8% compared with the industry’s 3.4% rise in the past year.