Glaukos (GKOS) Down 45.8% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Glaukos (GKOS). Shares have lost about 45.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Glaukos due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Glaukos Q4 Earnings and Revenues Surpass Estimates

Glaukos Corporation reported fourth-quarter loss per share of 6 cents, narrower than the Zacks Consensus Estimate of a loss of 17 cents. Notably, the company had delivered earnings per share of 8 cents a year ago.

For the full-year 2019, the company reported loss per share of 10 cents, narrower than the year-ago quarter’s loss of 29 cents per share.

Revenues in Detail

The company’s quarterly net sales totaled $65.9 million, which beat the Zacks Consensus Estimate by 4.4%. On a year-over-year basis, revenues improved 21.8%. Per management, the upside can be attributed to Glaucoma unit volume increases worldwide and contribution from the Avedro buyout.

For the full-year 2019, the company reported net sales of $236.9 million, up 30.7% from that of 2018.

Quarter Details

Gross profit in the fourth quarter was $49.9 million, up 6.4% year over year. Gross margin quarter was 75.8% of net revenues, down 1100 basis points on a year-over-year basis.

Operating expenses increased 76.7% to $79.6 million on a year-over-year basis courtesy of higher selling, general and administrative, and research and development expenses.

Financial Update

As of Dec 31, 2019, cash and cash equivalents came in at $62.4 million, which increased significantly from the year-ago quarter.

During the fourth quarter, total assets came in at $818.4 million compared with $206.9 million in the year-ago quarter.

2020 Guidance

Glaukos expects revenues in the range of $290-$300 million. The Zacks Consensus Estimate is pegged at $316 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -70% due to these changes.

VGM Scores

At this time, Glaukos has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Glaukos has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.