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Glaukos (GKOS) Gains 51.9% YTD: What's Driving the Stock?

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Glaukos (GKOS - Free Report) witnessed strong momentum in the year-to-date period. Shares of the company surged 51.9% compared with 4.3% growth of the industry. The S&P 500 Composite has risen 14.3% during the same time frame.

With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.

Headquartered in San Clemente, CA, Glaukos is an ophthalmic medical technology and pharmaceutical company. It is focused on the development and commercialization of novel surgical devices and sustained pharmaceutical therapies designed to treat glaucoma. The company’s flagship iStent is the first FDA-approved surgical device available for insertion in conjunction with cataract surgery.

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Catalysts Driving Growth

The rally in the company’s share price can be attributed to strength in its flagship iStent. The optimism led by a solid first-quarter 2024 performance and robust business potential are expected to contribute further. Moreover, investors are optimistic about continued strong demand across international glaucoma and Corneal Health franchises. Per the first quarter of 2024 earnings call, iStent continued to demonstrate robust demand with positive surgeon feedback, primarily highlighting its three-stent solution’s favorable safety profile and streamlined injector system.

Glaukos reported better-than-expected revenues in the first quarter led by strong demand for its products. Management is excited regarding the company’s continued top-line growth in the first quarter. GKOS has increased its guidance range for 2024. It now expects net sales in the range of $357-$365 million compared with the previous guidance of $350-$360 million. This must have aided in raising the stock’s price.

GKOS's glaucoma franchise witnessed growth in revenues during the first quarter of 2024, propelled by its iStent portfolio, which has driven the company's stock price. A PMA pivotal study for iStent infinite in patients with mild to moderate glaucoma is among the clinical trials in which the company has been making headway with recruitment.

The company's latest releases appear to be appealing to investors as well. GKOS started the initial phases of the controlled launch strategy for iDose TR after receiving FDA approval in the first quarter of 2024. The CMS has allocated exclusive permanent J-code and CPT codes for iDose TR.

Apart from the U.S. market, Glaukos is focusing on expanding globally. It currently sells its products through direct sales subsidiaries in 17 countries and independent distributors in certain countries. The company continues with its efforts to scale its international infrastructure and drive MIGS forward as a standard of care in each region. In the first quarter of 2024, GKOS’ International Glaucoma franchise delivered record sales of $25.2 million, which indicates year-over-year growth of 20% on a reported basis.

Risk Factors

The company currently sources components for the iStent, the iStent inject models, and other pipeline products from a small number of third-party suppliers and occasionally from a single supplier. If any one or more of these suppliers cease to provide GKOS with enough components or drugs in a timely manner or on acceptable terms, the company would have to seek alternative sources of supply.

A Look at Estimates

Glaukos’ loss per share in 2024 and 2025 is projected to narrow 0.9% and 42.8%, respectively, to $2.25 and $1.29 on a year-over-year basis.  The Zacks Consensus Estimate for loss per share has widened 1 cent for both 2024 and 2025 in the past 30 days.

Revenues for 2024 and 2025 are anticipated to rise 15.3% and 25.1%, respectively, to $362.8 million and $453.7 million on a year-over-year basis.

Stocks to Consider

Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report)

Elevance Health, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 12.2%. ELV’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Elevance Health’s shares have rallied 22.1% compared with the industry’s 5.5% rise in the past year.

Hologic, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.94%.

Hologic’s shares have risen 0.3% year to date compared with the industry’s 4.7% growth.

Universal Health Services has an Earnings ESP of +2.91% and a Zacks Rank of 2, at present. UHS has an estimated earnings growth rate of 30.5% for 2024.

UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.12%.

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