Why Is Glaukos (GKOS) Down 8.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Glaukos (GKOS). Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Glaukos due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Glaukos (GKOS) Q2 Earnings Miss Estimates, Revenues Beat
Glaukos Corporation reported an adjusted loss per share of 83 cents for the second quarter of 2022, wider than the adjusted loss of 22 cents reported in the year-ago quarter as well as the Zacks Consensus Estimate of a loss of 44 cents. The significant widening of loss was due to lower revenues as well as higher operating and non-operating expenses.
GAAP EPS for the quarter were 96 cents against a loss of 38 cents per share in the year-ago period.
Revenues in Detail
Glaukos registered revenues of $72.7 million in the second quarter, down 6.9% year over year on a reported basis. The figure, however, surpassed the Zacks Consensus Estimate by 7.5%.
Quarter in Details
In the quarter under review, Glaukos recorded Glaucoma net sales of $56.1 million and Corneal Health net sales of $16.6 million.
Margin Trend
In the quarter under review, Glaukos’ gross profit rose 16.9% to $73.5 million. Gross margin contracted approximately 200 basis points (bps) to 75%.
Selling, general and administrative expenses rose 10% to $49.9 million. Research and development expenses went up 31% year over year to $31.7 million. Total operating expenses of $70.8 million increased 12.2% year over year.
Operating loss in the reported quarter totaled $91.6 million compared with a total operating loss of $74.6 million in the year-ago quarter.
Financial Update
Glaukos exited second-quarter 2022 with cash and cash equivalents, and short-term investments of $391.2 million compared with $415.4 million at the end of the first quarter.
2022 Guidance
Glaukos raised the upper range of its revenue outlook for the full year based on solid execution globally and better-than-expected revenues.
For 2022, Glaukos now expects net sales between $270 million and $280 million, compared with the previous projection of net sales between $270 million and $275 million. The Zacks Consensus Estimate for the same stands at $273.37 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -12.73% due to these changes.
VGM Scores
At this time, Glaukos has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Glaukos has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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