On Tuesday, BTIG maintained a Buy rating on RxSight Inc. (NASDAQ: RXST) and increased the stock price target to $72 from $61 following the company's first-quarter results for fiscal year 2024. RxSight reported a notable first quarter with revenues reaching $29.5 million, a 69% year-over-year increase, and an adjusted loss per share (LPS) of $(0.25).
These figures surpassed BTIG and consensus estimates, which predicted revenues of $27.2 million and $27.6 million and an adjusted LPS of $(0.32) and $(0.29), respectively.
The company's performance was bolstered by the sale of 66 Light Delivery Devices (LDDs), marking an 18% year-over-year growth, although this represented a 14.3% decrease from the previous quarter.
Moreover, there was a significant surge in the number of Light Adjustable Lenses (LALs) sold, totaling 20,218, which indicates a 92% year-over-year increase and an 11.9% rise from the previous quarter. Utilization metrics also showed positive trends, with an average of 10.1 LALs per LDD per month, even in what is typically a softer quarter for sales.
A major highlight from the quarter was the gross margins (GMs), which soared to approximately 70.1%, a record high for the company, up from around 61.8% in the fourth quarter of 2023. This improvement was attributed to the growing sales of LALs, which are becoming a more significant part of the company's revenue stream.
In light of these strong results, RxSight has upgraded its full-year 2024 revenue guidance by $3 million at the midpoint, establishing a new range of $132.0 million to $137.0 million, which would represent a 48% to 54% year-over-year growth. The company also anticipates further increases in gross margin guidance as the adoption of LALs continues to drive both the top-line revenue and profit margins.
The firm believes that the increased guidance is attainable with only a modest increase in utilization for the remainder of the year. Moreover, with RxSight's intensified focus on educational efforts and new programs, it is expected that more physicians will begin offering LALs as a premium service.
The trajectory of the gross margins and the clear path to profitability by fiscal year 2026, combined with the fact that the company has only begun to penetrate the broader worldwide premium Intraocular Lens (IOL) market valued at approximately $3.5 billion, suggests that RxSight has significant growth potential ahead.
InvestingPro Insights
In the wake of BTIG's optimistic outlook on RxSight Inc. (NASDAQ: RXST), InvestingPro data offers a deeper dive into the company's financial health and stock performance. With a market capitalization of $2.34 billion, RxSight is trading at a high Price / Book multiple of 14.57, reflecting a premium valuation in the market.
Despite the company's lack of profitability in the last twelve months, with a negative P/E Ratio of -49.61, RxSight has demonstrated impressive revenue growth of 81.77% over the same period.
InvestingPro Tips indicate that RxSight's stock is currently in overbought territory based on the RSI, which could suggest a near-term pullback. Still, the company has seen a significant return over the last week, with a 20.54% price total return, and a staggering 242.45% return over the past year, highlighting the strong investor confidence in its growth trajectory.
It is worth noting that analysts are not expecting the company to be profitable this year, but the high return over the last year and the liquid assets exceeding short-term obligations indicate a solid financial standing.
For readers looking to gain additional insights, there are more InvestingPro Tips available for RxSight. To explore these valuable tips and better inform your investment decisions, consider subscribing to InvestingPro. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 16 additional InvestingPro Tips listed that could provide further guidance on the stock's potential.
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