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Glaukos (GKOS) Beats Estimates on Narrower-than-Expected Loss (revised)

Zacks Equity Research
·4 min read

Shares of Glaukos Corporation GKOS have gained 11.8% on Nov 5, 2020, following the company's third-quarter 2020 results.

The company reported third-quarter loss per share of 9 cents, significantly narrower than the Zacks Consensus Estimate of a loss of 46 cents. Notably, the company had delivered loss per share of 10 cents in the prior-year quarter.

Revenues in Detail

Quarterly net sales totaled $64.8 million, which surpassed the Zacks Consensus Estimate by 19.6%. On a year-over-year basis, revenues improved 10.8%.

Quarter Details

Gross profit in the third quarter was $46.9 million, down 7.7% year over year. Gross margin was 72.3% of net revenues, down 1450 basis points on a year-over-year basis.

Glaukos Corporation Price, Consensus and EPS Surprise

Glaukos Corporation Price, Consensus and EPS Surprise
Glaukos Corporation Price, Consensus and EPS Surprise

Glaukos Corporation price-consensus-eps-surprise-chart | Glaukos Corporation Quote

Operating expenses declined 6.3% to $59.3 million on a year-over-year basis, courtesy of lower selling, general and administrative expenses.

Operating loss in the quarter under review was $12.4 million, remaining flat on a year-over-year basis.

Financial Update

The company exited the third quarter with cash, cash equivalents and short-term investments of $388.4 million, up from $174 million as of year-end 2019.

During the third quarter, total current assets totaled $454.4 million, compared with $453.2 million in the preceding quarter.

2020 Guidance

Glaukos has withdrawn its previously announced (Feb 27, 2020) annual guidance for 2020 due to the rapidly evolving environment and persistent uncertainties stemming from the COVID-19 pandemic. At this point, the company is unable to estimate the scope and duration of the impact of the pandemic on its financial and operating results.

Our Take

Glaukos exited the third quarter on a strong note. The company also reported an improvement in revenues in the third quarter. Further, advancement in its market-expanding pipeline and execution of quite a few business development growth initiatives that include the Avedro buyout buoys optimism. Also, the company’s U.S. Glaucoma franchise saw a solid recovery during the quarter under review courtesy of practices boosting their operational efficiency and rise in new patient demand with the easing of prior restrictions.

However, the company faces cut-throat competition in the Medical Devices space. The company witnessed a contraction in its gross margin, while reporting operating loss in the quarter under review.

Zacks Rank

Glaukos carries a Zacks Rank #3 (Hold).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. TMO, Align Technology, Inc. ALGN and AngioDynamics, Inc. ANGO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

AngioDynamics reported first-quarter fiscal 2021 adjusted earnings per share (EPS) of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

(NOTE: We are revising this article to correct a misconception. The original version, published earlier today, November 10, 2020, should no longer be relied on.)

 

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