Investing.com -- JP Morgan downgraded RxSight to Underweight, citing market, economic, and competitive headwinds that have led to a weaker-than-expected first-quarter performance and a downward revision to 2025 guidance.

The firm set a $17 price target on the stock.

RxSight pre-announced first-quarter revenue of approximately $37.9 million, representing a 28% year-over-year increase but falling short of Wall Street estimates of $39.4 million.

The shortfall was attributed to a weaker premium intraocular lens (IOL) market, increased competition from new product launches, and an unexpected decline in consumer sentiment late in the quarter.

For the full year, the company lowered its revenue guidance to $160-175 million, down from its prior outlook of $185-197 million.

Operating expense projections were also reduced to $150-160 million from the previous $165-170 million range.

JP Morgan noted that while the revised outlook may set a more achievable baseline, RxSight’s peers have not reported similar acute market challenges, raising concerns over whether the issues are industry-wide or company-specific.

The brokerage highlighted that RxSight’s first-quarter performance saw a sequential revenue decline of around 6% compared to the fourth quarter of 2024.

Sales of Light Adjustable Lenses (LALs) rose 36% year-over-year to 27,579 units but still fell below JPMorgan’s estimates of 31,000. However, Light Delivery Device (LDD) placements exceeded expectations, reaching 73 versus the forecasted 66.

While the company secured CE Mark approval for its LDD/LAL System, JPMorgan expects international expansion to be gradual. Given ongoing market and competitive pressures with no clear resolution timeline, the firm sees further downside risk to RxSight’s growth trajectory.

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