Wednesday - Lake Street Capital Markets has adjusted the price target for Sight Sciences Inc. (NASDAQ: SGHT) stock, reducing it to $3.00 from the previous $5.00, while maintaining a Hold rating on the company's shares. Currently trading at $3.15, the stock has experienced significant volatility, falling nearly 60% over the past six months.
According to InvestingPro analysis, the stock appears to be trading near its Fair Value, with analysts setting targets between $4.00 and $6.00. The revision follows recent changes in Medicare coverage that have impacted the industry.
In November 2024, Medicare administrative contractors issued Local Coverage Determinations (LCDs) that limit coverage for certain glaucoma procedures.
These changes restrict physicians from billing for multiple minimally invasive glaucoma surgeries (MIGS) in combination, a practice that previously accounted for approximately 15% of all procedures in 2024. As a result, doctors are now required to choose a single MIGS procedure for billing purposes.
This policy shift has created challenges across the industry, contributing to a contraction in total market share for Sight Sciences. The company anticipates this trend to continue through at least the first half of the year.
Despite these setbacks, Sight Sciences is actively managing its finances to maintain sufficient liquidity, with InvestingPro data showing a strong current ratio of 10.18 and more cash than debt on its balance sheet.
The firm's strategy aims to not only withstand the current difficulties but also to ensure enough capital is available to invest in growth opportunities once the market stabilizes. Subscribers to InvestingPro can access 8 additional key insights about the company's financial health and market position.
Lake Street Capital Markets acknowledges the potential for growth in Sight Sciences' standalone MIGS and Dry Eye business segments. However, analysts have decided to uphold the Hold rating until there is clear evidence of stabilization in the company's primary MIGS and cataract operations and a resolution to the reimbursement uncertainties.
The firm's analysts believe that the risks are relatively limited due to Sight Sciences' current market valuation and strong balance sheet. In light of these factors, along with the intention to align the price target with the current market multiples, the decision was made to lower the price target to $3.00.
In other recent news, Sight Sciences, Inc. (NASDAQ:SGHT) has projected modest revenue growth in Q4, with surgical glaucoma product sales driving this increase. The company's preliminary financial results for the fourth quarter and full year of 2024 indicate a slight increase in total revenue for the quarter, while annual revenue is expected to decline by 2% compared to 2023. Despite this, surgical glaucoma revenues are expected to grow by 2%.
In a recent study, the company's OMNI Surgical System demonstrated effectiveness in reducing intraocular pressure in patients with primary open-angle glaucoma. Sight Sciences has also secured an additional $5 million in loan funding from its existing credit facility with Hercules Capital (NYSE:HTGC), Inc. and affiliates, raising the total borrowed amount to $40 million.
UBS has initiated coverage of Sight Sciences with a Buy rating, forecasting strong sales growth by 2026. The UBS analyst expects the company's TearCare Dry Eye solution to drive double-digit sales growth and gross margin expansion that exceeds consensus estimates for 2026 and beyond.
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