Feltl and Company Upgrades TearLab Corporation, Shares Fall 11%

Feltl and Company upgraded TearLab Corporation TEAR from Buy to Strong Buy Thursday and lowered its price target from $6.25 to $5.

Analysts Ben C. Haynor and Ryan J. Thimjon believed “TearLab to be a unique medical technology company. There are few medical technology firms targeting a $1+ billion high-growth market, facing no competition, having approvals and reimbursement in place, which are likely to reach (or will have reached) profitability at a revenue run rate of less than $75 million.”

Wednesday the company reported “revenue of $5.2 million versus our $5.9 million estimate and $5.5 million consensus. Loss per share of ($0.17) was inline with consensus, but a penny below our estimate.”

Haynor commented that “while the revenue results and guidance were disappointing, it appears the “transition year” that has been 2014 is now behind the company; management is pleased with the sales force in place and has all territories staffed.”

The analyst report concluded that “the company is currently experiencing growing pains as it develops the point-of-care dry eye diagnostic market. We believe the company will ultimately be successful in seeing wide adoption of their solution, but think there may be little for investors to get excited about during the balance of 2014.

TearLab Corporation fell sharply at the open Thursday and recently traded at $2.37, down 11.24 percent.