RxSight is Thursday's IBD 50 Growth Stocks To Watch pick as it sits in a buy zone of a cup-with-handle base. The cataract-surgery lens maker raised its full-year revenue guidance in its latest earnings report.
According to the company, cataract surgery is the most common procedure in the U.S., with about 50% of Americans developing cataracts by age 75. Cataracts can lead to blindness if untreated. In surgery, a patient's natural lens is removed and replaced with a clear synthetic one. RxSight makes the only FDA-approved intraocular lens that can be customized and adjusted after cataract surgery.
Its Light Adjustable Lens is made of a special photosensitive material that changes the shape and power of a patient's implanted lens in response to ultraviolet (UV) light to optimize vision.
Cataract Surgery Lens Stock In Buy Zone
RxSight stock broke out of a stage-two cup-with-handle base with a 57.22 buy point on May 2, just days before the company's earnings report. The stock is in the 5% buy zone up to 60.01.
Shares tested their 50-day moving average and have found support at the line. The stock has climbed 44% so far this year and around 240% since its April 2023 initial breakout.
Shares climbed in heavy volume on May 9, after the company announced it had priced a public offering of 1,785,714 shares of common stock at $56 per share.
The stock went public on July 30, 2021, with an initial offering price of 16 a share, according to IBD MarketSurge.
Profit Outlook Bright For Cataract Surgery Play
RxSight reported a smaller-than-expected first-quarter loss and higher sales than estimates on May 6. First-quarter sales grew 69% over the prior year's quarter.
The cataract surgery lens company increased its full-year revenue guidance to $132 million to $137 million, or 48% to 54% growth, compared with 2023. Its prior guidance was $128 million to $135 million.
Its losses have been decreasing, and FactSet estimates show two more quarters of losses before RxSight posts a profit in the fourth quarter. Full-year estimates call for a loss of 26 cents per share in 2024, then a profit of 20 cents in 2025. That would be a 176% increase, although calculated from a year-ago loss.
RXST stock holds an IBD Composite Rating of 89, while its EPS Rating is a suboptimal 59 due to losses in 2021-23.
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