Call it Black Thursday for four Orange County-based medical device companies with market caps topping a billion dollars.
These four firms—all pioneers in their space—saw their stocks plunge anywhere from 7.6% to 17% on Nov. 2 after reporting quarterly results.
Tied for the biggest one-day drop was Lake Forest-based Staar Surgical Co. (Nasdaq: STAA), off 17% to $36.01 and a $1.7 billion market cap. While the maker of implantable eye lenses reported third-quarter profit topped analysts’ consensus estimate, it reduced its annual revenue forecast, which implies a fourth-quarter revenue around $74 million when analysts expected $76.8 million.
What seems to have caught investors’ ire was a slow start to U.S. sales, which the company has been working to boost this year. At its investor day in September, Staar executives projected a compounded annual growth rate in the U.S. around 30% to 50% by 2026.
“The U.S. is going to be a little bit of a slow-go in the short term here until we move into 2024,” Chief Financial Officer Patrick Williams told analysts on a call.
“We expect that we’ll continue to see flattish growth in the U.S. sequentially here now until we move into the second half of 2024.”
By contrast, sales in China, which represents almost 80% of Staar’s revenue, are expected to grow 25% in the current quarter, Jefferies analyst Young Li said in a note to investors.
Earlier last week, an investor suggested Staar to consider spinning off its Chinese unit, saying it could be worth as much as $5 billion.
NARI
Irvine-based Inari Medical Inc. (Nasdaq: NARI) also dropped 17% to $50.99 and a $2.9 billion market cap.
While the maker of treatments for vein blockages beat third-quarter revenue estimates by $4.5 million, it raised its annual forecast only by $4.5 million to $490 million to $493 million.
The implication is that fourth-quarter revenue will “decelerate” to growth around 22%, below the company’s prior growth of 30% per quarter this year, Canaccord analyst William John Plovanic said on a conference call with the company.
The forecast is “just wanting to feel comfortable with the numbers we provide to the Street,” CFO Mitchell Hill replied.
The company said it would pay $250 million in cash and up to $165 million more in incentives to acquire LimFlow S.A., a privately held device maker company.
GKOS, NVST
Aliso Viejo-based Glaukos Corp. (NYSE: GKOS) was off 9.3% to $62.87 and a $3 billion market cap.
While the maker of glaucoma treatments reported third-quarter revenue of $78 million, beating the average analyst estimate by $3 million, it only boosted its annual forecast by $2 million to $3 million to $307 million to $310 million.
The annual forecast implies the company may miss analysts’ fourth-quarter consensus for $77.3 million.
Shares of Envista Corp. (NYSE: NVST), a Brea-based maker of dental equipment, fell 9.3% to $20.86 and a $3.4 billion market cap.
It missed consensus analyst estimates for both third-quarter revenue and profit. It also cut its annual revenue forecast to “be down slightly” from last year’s $2.57 billion, citing “continued uncertainties in the macro environment, volatility in the North American distribution channel and our continued investment in our long-term growth initiatives.”
Analysts had forecast 2.6% growth to $2.63 billion for 2023.
