Shares of Glaukos Corporation GKOS scaled a new 52-week high of $155.76 on Jan. 6, before closing the session marginally lower at $155.20.

Over the past year, this Zacks Rank #3 (Hold) stock has surged 89.3% compared with the 6.4% rise of the industry and the S&P 500’s 26.8% growth.

Glaukos, with a market capitalization of $8.56 billion, is a renowned ophthalmic medical technology and pharmaceutical company. It projects earnings growth of 16.7% for 2024, followed by a 42.8% improvement in 2025. It expects to maintain its strong revenue performance, growing 26.3% in 2025.

GKOS is witnessing an upward trend in its stock price, prompted by strength in its product portfolio. The optimism led by a solid third-quarter 2024 performance and potential in its international market are expected to contribute further. However, stiff competition and pipeline setbacks continue to concern the company.

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Let’s delve deeper.

Key Growth Drivers Aiding Glaukos

Product Portfolio: Investors are optimistic about Glaukos’ solid product portfolio. Last month, the company announced the submission of its New Drug Application (NDA) to the FDA for Epioxa (Epi-on), its next-generation corneal cross-linking iLink therapy for the treatment of keratoconus (a progressive, sight-threatening corneal disease).

The iStent portfolio significantly boosted Glaukos' glaucoma franchise revenues in the first nine months of 2024. Additionally, the launch of iDose TR in second-quarter 2024 is already enhancing revenue growth, beginning in the third quarter. With a permanent J-code for iDose TR effective July 1, patient access is likely to increase, driving future sales.

Potential in International Market: Investors are optimistic about Glaukos’ prospects in its international operations. The company sells its products through subsidiaries in 17 countries and independent distributors in other markets. GKOS’ international glaucoma franchise recorded 17% growth from the comparable period in 2023. This global expansion is expected to continue to support the company's long-term growth trajectory.

Strong Q3 Results: Glaukos’ robust third-quarter 2024 results raise investors’ optimism. Per management, the results reflected the successful global execution of its key strategic plans and continued strong momentum in its business. Management also stated that GKOS is continuing to advance its robust pipeline of novel, dropless platform technologies designed to meaningfully advance the standard of care and improve outcomes for patients suffering from chronic eye diseases.

Downsides to GKOS

Pipeline Setbacks: Although Glaukos has a promising pipeline, it has faced setbacks with clinical development or regulatory activities. Any potential clinical or regulatory setbacks can lead to an adverse impact on the company’s share price, thereby hurting investors’ wealth. The development of Glaukos’ iLink system using the Epioxa therapy candidate was delayed following a pre-NDA submission meeting in 2022 that recommended a second confirmatory study.

Stiff Competition: Glaukos’ competitors include medical companies, academic and research institutions or others that develop new drugs, therapies, medical devices or surgical procedures to treat glaucoma. The company has many competitors, including divisions of larger companies that have greater resources and recognition, and smaller companies that compete against specific products or in certain geographies.

Key Picks

Some better-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 (Buy) at present, has an estimated long-term growth rate of 10.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with 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 13.8% compared with the industry’s 1.2% growth in the past year.

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, with the average being 6.4%.

ResMed has gained 36.1% compared with the industry’s 8.5% growth in the past year.

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, with the average surprise being 8.3%.

Boston Scientific’s shares have rallied 56.3% compared with the industry’s 8.5% growth in the past year.

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