GKOS Stock Falls Despite Q4 Earnings & Revenue Beat, Margins Decline

Glaukos Corporation GKOS reported fourth-quarter 2024 adjusted loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 43 cents. The figure also improved from the year-ago quarter’s adjusted loss of 63 cents per share.

The GAAP loss per share was 60 cents compared with the prior-year quarter’s reported loss of 75 cents.

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Revenue Details

Glaukos registered revenues of $105.5 million in the fourth quarter, up 28.1% year over year on a reported basis as well as at constant currency (cc). The figure also surpassed the Zacks Consensus Estimate by 4.7%.

Quarter in Detail

The company recorded net sales of $84.1 million for Glaucoma, up 39% year over year. Sales at Corneal Health remained almost flat year over year.

Glaukos Corporation Price, Consensus and EPS Surprise

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

Margin Analysis

Gross profit increased 21.1% year over year to $76.9 million. However, the adjusted gross margin was 82% compared with 84% in the year-ago period.

Selling, general and administrative expenses rose 9.5% year over year to $69 million. Research and development expenses totaled $36.5 million, down 1.4% year over year. Total operating expenses were $105.5 million, up 3.4% from that recorded in the prior-year period.

The operating loss declined to $28.7 million from $38.6 million in the year-ago period. The adjusted operating loss was $18.3 million, narrower than the year-ago quarter’s reported loss of $32.4 million.

Financial Update

Glaukos exited the fourth quarter of 2024 with cash and cash equivalents and short-term investments of $324 million compared with $267.2 million at the end of third-quarter fiscal 2024.

2025 Guidance

The company issued guidance for 2025 revenues. It expects net sales to be in the range of $475-$485 million compared with the previous guidance of $370-$376 million. The Zacks Consensus Estimate for the same is pegged at $477.7 million. The loss per share estimate is pinned at $1.08, implying 42.8% improvement year over year.

Our Take

Glaukos' exited the fourth quarter of 2024 with better-than-expected results, wherein earnings and revenues surpassed their respective consensus estimate. Management remains excited regarding the company’s continued top-line growth in the reported quarter.

During the fourth quarter, GKOS’ glaucoma franchise witnessed revenue growth, driven by its iStent portfolio, coupled with growing contributions from iDose TR. Establishing permanent J-code, CPT codes and advanced Medicare Administrative Contractor (MAC) coverage had been driving iDose TR adoption in the second half of 2024, a trend which is likely to continue in 2025. Moreover, GKOS plans to broaden the market access further for iDose TR this year by establishing new coverages from MACs, commercial and Medicare Advantage payors. Successful completion of new coverages should accelerate adoption for iDose TR as we move ahead in 2025.

GKOS continues to invest in its product pipeline. It submitted an NDA for its corneal cross-linking therapy, Epioxa, last year and expects an approval by the end of 2025. On its third-quarter earnings call, management announced positive top-line outcomes in the second Phase 3 pivotal study for Epioxa. It also declared that the therapy met the study's primary efficacy endpoint.

The company is conducting phase 2b/3 clinical trial for its next-generation iDose therapy, iDose TREX. GKOS is also planning to start enrollment in a pivotal trail evaluating iStent Infinite for treating mild-to-moderate glaucoma. It is also seeking approval for the candidate in Europe as a treatment for advanced refractory glaucoma.

However, GKOS’ operating loss in the reported quarter amid rising costs and expenses raised our apprehension. Its operation in a stiff, competitive market is also worrisome.

Shares of GKOS lost 13.6% during after-market trading following the fourth-quarter results. However, the company’s shares have gained 6.1% year to date against the industry’s decline of 0.1%. The broader S&P 500 Index has increased 10% in the same time frame.

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Zacks Rank and Other Stocks to Consider

Currently, Glaukos carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the industry have been discussed below.

Avenna Healthcare AVAH, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated earnings growth rate of 666.7% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.

AVAH delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March. Its shares have lost 4% in the past six months against the industry’s 2.1% growth.

Alphatec ATEC, carrying a Zacks Rank #2 at present, has an estimated growth rate of 40% for 2025. Its earnings missed estimates in each of the trailing four quarters, delivering an average surprise of 12.60%. The company is scheduled to release fourth-quarter results on Feb. 26.

ATEC’s shares have gained 87.7% against the industry’s 0.1% decline in the past six months.

Masimo MASI, carrying a Zacks Rank #2 at present, has an estimated growth rate of 9.5% for 2025.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47% against the industry’s 0.1% decline in the past six months. The company is scheduled to release fourth-quarter results on Feb. 25.

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