Stifel's Doctor Survey Triggers Glaukos Downgrade

The bullish case for Glaukos Corp GKOS, a company focusing on designing products and procedures for the treatment of glaucoma, is based on expectations the company will stabilize its micro-invasive glaucoma surgery concomitant market share in 2019. But after speaking with dozens of doctors, Stifel is moving to the sidelines.

The Analyst

Stifel's Jonathan Block downgraded Glaukos' stock rating from Buy to Hold with a price target lowered from $39 to $32.

The Thesis

Block surveyed 71 doctors who focus on two primary areas: glaucoma specialists and other comprehensive ophthalmic surgeons and high volume cataract surgeons.

Among his primary findings were that more than 90 percent of iStent doctors plan to get training on the rival product Hydrus; the competitor is expected to capture a 22-percent share of the concomitant MIGS market in 2020, and most of the share gains will come at the expense of Glaukos, the analyst said. 

Prior to the survey, the analyst's estimates suggested Glaukos would take a 48-percent share of the MIGS concomitant market. But following the survey, Block said it is more likely that the company will lose share in 2018, a trend that he projects will continue into 2019. Over the longer term,the survey did find some encouraging data points for Glaukos among doctors who use a MIGS device for standalone pseudophakic glaucoma patients.

Stifel's $32 price target is based on a target EV/sales multiple of 6x on 2019 estimates.

Price Action

Shares of Glaukos were trading lower by nearly 7 percent in premarket trading Friday.

Related Links:

Glaukos Has 84% Upside Potential In 2018, According To Cantor

Glaukos Way Ahead Of The Glaucoma Competition