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Here's Why You Should Retain Glaukos (GKOS) in Your Portfolio

Glaukos Corporation GKOS is well-poised for growth, backed by favorable clinical trial results and a robust product pipeline. However, stiff competition remains a concern.

Shares of this Zacks Rank #3 (Hold) have gained 6.3% against the industry’s decline of 29.2% on a year-to-date basis. The S&P 500 Index has fallen 18.3% in the same time frame.

Glaukos — with a market capitalization of $2.25 billion — is a leading ophthalmic medical technology and pharmaceutical company. It projects earnings growth of 16.3% for 2023 and expects to sustain its strong performance. The company has a trailing negative four-quarter earnings surprise of 7.6%, on average.

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Zacks Investment Research

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Key Catalysts

Clinical trials are the primary means to evaluate the efficacy and safety of new medical technologies.

Glaukos launched iPrime — a new disco elastic delivery device — in the latter part of the second quarter. In the latter part of the first quarter, the company had launched the iAccess device for go anatomy procedures. The addition of these new devices will provide unique solutions designed to grow and improve treatment options for surgeons, customers and patients. The company’s iAccess device received positive market feedback.

In August, Glaukos received clearance from the FDA for the commercialization of iStent infinite as an implantable device intended to reduce the intraocular pressure (IOP) of the eye in adult patients with primary open-angle glaucoma in whom previous medical and surgical treatment failed. The company plans to launch the product during the fourth quarter.

In September, Glaukos announced that its targeted injectable implant candidate — iDose TR — for glaucoma patients achieved excellent tolerability and a favorable safety profile, per top-line data from two pivotal studies. The candidate achieved non-inferior reductions in IOP in three months from baseline compared to the timolol ophthalmic solution. Based on these data, the company is planning to file a new drug application (NDA), seeking approval for iDose TR from the FDA by the end of 2023. A potential approval for the candidate will substantially boost revenues for Glaukos.

The company is also developing three other candidates — GLK-301, GLK-302 and third-generation iLink therapy — in separate phase II studies as a potential treatment for Dry Eye Disease, presbyopia and keratoconus, respectively.

These positive developments raise our optimism about the stock.

Glaukos’s better-than-expected revenues and earnings in the third quarter were also encouraging.

Factor Hurting the Stock

Glaukos’ competitors include medical companies, academic and research institutions, and others that develop new drugs, therapies, medical devices or surgical procedures to treat glaucoma. Thus, intense competition continues to weigh on the company’s overall performance.

Estimates Trend

For 2023, the consensus mark for the bottom line is pegged at a loss of $1.84 per share, estimated to be 16.3% narrower than the anticipated loss of $2.20 per share in 2022. The same for 2023 revenues stands at $306.56 million, suggesting growth of 9.8% from the anticipated 2022 number.

Glaukos Corporation Price

Glaukos Corporation Price
Glaukos Corporation Price

Glaukos Corporation price | Glaukos Corporation Quote

Stocks to Consider

Some better-ranked stocks in the broader medical space are AMN Healthcare Services AMN, McKesson MCK and Lantheus LNTH, all currently carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN stock has declined 1.2% so far this year.

AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.

McKesson’s earnings per share estimates have increased from $24.42 to $24.76 for fiscal 2023 and $26.04 to $26.34 for fiscal 2024 in the past 60 days. MCK has gained 48.4% so far this year.

McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.

Estimates for Lantheus’ earnings per share have increased from $3.57 to $3.82 for 2022 and $4.01 to $4.21 for 2023 in the past 60 days. LNTH has gained 98.7% so far this year.

Lantheus has an earnings yield of 6.6% against a negative yield for the industry.

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McKesson Corporation (MCK) : Free Stock Analysis Report

AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report

Glaukos Corporation (GKOS) : Free Stock Analysis Report

Lantheus Holdings, Inc. (LNTH) : Free Stock Analysis Report

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