Shares of Glaukos Corporation (GKOS Quick QuoteGKOS - Free Report) scaled a new 52-week high of $116.91 on Jun 26, before closing the session marginally lower at $116.66.

Over the past year, this Zacks Rank #3 (Hold) stock has surged 65.9% compared with the 3.4% rise of the industry and the S&P 500’s 25.2% growth.

The company’s expected growth rate of 1.3% for 2024 compares with the industry’s growth projection of 12%. GKOS expects a growth rate of 42.9% for 2025, which compares with the industry’s expectation of 21.7%.

Glaukos is witnessing an upward trend in its stock price, prompted by its strength in its flagship iStent. The optimism led by a solid first-quarter 2024 performance and potential in its international market are expected to contribute further. However, stiff competition and pipeline setbacks continue to concern the company.

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Let’s delve deeper.

Key Growth Drivers

Strength in iStent: Investors are optimistic about Glaukos’ prospects with respect to its iStent. Currently, the iStent procedure is reimbursed in the United States by Medicare and all major national private payors. It is also commercially available in certain European Union countries, Brazil, Canada, Australia, Japan and other countries.

During the first quarter of 2024, GKOS’s glaucoma franchise witnessed growth in revenues driven by its iStent portfolio. The company has been continuing to make enrolment progress in several clinical trials, which include a premarket approval pivotal trial for iStent infinite in mild to moderate glaucoma patients.

Potential in International Market: Investors are optimistic about Glaukos’ prospects in its international operations. The company has been developing a sales base and increasing marketing and market access efforts. It currently sells its products primarily through direct sales subsidiaries in 17 countries and through independent distributors in certain countries.

The company’s continued efforts to scale its international infrastructure and execute the plans to drive Micro Invasive Glaucoma Surgery forward as a standard of care in each region and every major market in the world will likely boost glaucoma revenues going forward.

Strong Q1 Results: Glaukos’ robust first-quarter 2024 results raise investors’ optimism. The company continued to invest in its product pipeline. Per management, GKOS is targeting NDA submission for its corneal cross-linking therapy, Epioxa, by the end of 2024, which is currently progressing toward the second Phase 3 pivotal trial completion.

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 an 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.

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’s present or future products could be rendered obsolete as a result of advances by one or more of its present or future competitors or by other surgical or pharmaceutical therapy developments.

Key Picks

Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA Quick QuoteDVA - Free Report) , LeMaitre Vascular, Inc. (LMAT Quick QuoteLMAT - Free Report) and Ecolab Inc. (ECL Quick QuoteECL - Free Report) .

DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DaVita’s shares have gained 42.9% compared with the industry’s 14.1% rise in the past year.

LeMaitre Vascular, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 18.5%. LMAT’s earnings surpassed estimates in each of the trailing four quarters, with the average being 10.1%.

LeMaitre Vascular has gained 23.6% against the industry’s 2% decline in the past year.

Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.3%.

Ecolab’s shares have rallied 32.7% against the industry’s 12.8% decline in the past year.