Glaukos Corporation GKOS is well-poised for growth on the back of favorable clinical trial results and a robust product pipeline. However, stiff competition is a concern.
Shares of this Zacks Rank #2 (Buy) company have risen 29.9% in the past six months compared with the industry’s 1.8% growth. The S&P 500 Index has also increased 6.2% in the same time frame.
Glaukos, with a market capitalization of $8.63 billion, is a leading ophthalmic medical technology and pharmaceutical company. It projects earnings growth of 42.3% for 2025. It expects to maintain its strong revenue performance, growing 26.3% in 2025.
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The company has a trailing four-quarter average earnings surprise of 3.24%.
Key Catalysts
Strong Product Demand: Glaukos' rising share price is largely driven by the success of its flagship product, iStent. The company delivered robust performance during the first nine months of 2024 and maintains a favorable business outlook, strengthening investor confidence. Additionally, high demand for Glaukos' international glaucoma and Corneal Health products continues to fuel investor optimism.
During its third-quarter earnings call, Glaukos highlighted the increasing adoption of iStent infinite for glaucoma patients, particularly those unresponsive to other treatments. This growth has been fueled by enhanced clinical education and improved market access. Furthermore, five out of seven Medicare Administrative Contractors have released draft local coverage determinations for iStent infinite. This is anticipated to expand patient access.
Glaukos’ revenues have surpassed estimates in the first nine months of 2024 due to high demand for its products. Consequently, the company raised its full-year 2024 revenue guidance to $377-$379 million from $370-$376 million, contributing to the rising momentum in its share price.
Expanding Product Portfolio: The iStent portfolio significantly boosted Glaukos' glaucoma franchise revenues in the first nine months of 2024. Additionally, the launch of iDose TR in the second quarter is already enhancing revenue growth, beginning in the third quarter. With a permanent J-code for iDose TR effective from July 1, patient access is likely to increase, driving fourth-quarter sales.
Glaukos continues to invest in its product pipeline, including its corneal cross-linking therapy, Epioxa. The company submitted a new drug application seeking approval for the therapy last month. GKOS has successfully completed two pivotal trials on Epioxa, demonstrating its favorable efficacy, tolerability and safety profiles. The company is also preparing for a pivotal study on its next-generation iDose therapy, iDose TREX, which is set to begin soon. These initiatives are poised to drive long-term growth.
Internationally, Glaukos is focused on expanding its footprint. The company sells its products through subsidiaries in 17 countries and independent distributors in other markets. Glaukos' international glaucoma franchise reported record sales of $83.5 million in the first nine months of 2024, reflecting 17% year-over-year growth. This global expansion is expected to continue to support the company's long-term growth trajectory.
What’s Hurting GKOS?
The company currently depends on a limited number of third-party suppliers, including some sole suppliers, for components of the iStent, iStent inject models and other pipeline products. If any of these suppliers fail to provide sufficient quantities of components or drugs in a timely manner or on acceptable terms, Glaukos would need to seek alternative sources.
The production of the iStent, iStent inject models and other products in development relies on a select group of third-party suppliers, sometimes exclusively. If these suppliers do not deliver the necessary components or drugs promptly or on acceptable terms, Glaukos would have to find other suppliers to maintain its production line.
The bottom-line estimate for GKOS is pegged at a loss of $1.08 per share for 2025, which narrowed 4.4% in the past 60 days. The Zacks Consensus Estimate for 2025 revenues is pinned at $478.1 million, indicating growth of 26.3% from the top line recorded in 2024.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 11.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health’s shares have gained 25.3% compared with the industry’s 3.2% growth in the past six months.
ResMed, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
ResMed has gained 22.6% compared with the industry’s 9.1% growth in the past six months.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
Boston Scientific’s shares have rallied 20.9% compared with the industry’s 9.1% growth in the past six months.
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