RxSight’s Undervaluation and Growth Potential Justify Buy Rating Despite Revenue Shortfall

RxSight (RXST – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Ryan Zimmerman from BTIG maintained a Buy rating on the stock and has a $44.00 price target.

Ryan Zimmerman has given his Buy rating due to a combination of factors including RxSight’s current valuation and growth potential. Despite the company’s preliminary results showing revenue below expectations and a reduction in FY25 guidance, Zimmerman believes the stock is undervalued. The shares are trading at a lower multiple compared to peers, which presents a buying opportunity given the company’s estimated compound annual growth rate of approximately 26% over three years, surpassing the peer average of 18%.
Zimmerman acknowledges the challenges RxSight faces, such as decreased productivity and a softening economy, but suggests that the company’s strategy to reset expectations could lead to future outperformance. The analyst remains optimistic that if RxSight can improve customer adoption rates and address economic impacts, the stock could perform well post-reset. This perspective underpins the Buy rating, as the potential for growth and recovery is seen as outweighing the current setbacks.

Zimmerman covers the Healthcare sector, focusing on stocks such as Globus Medical, Staar Surgical, and LENSAR. According to TipRanks, Zimmerman has an average return of -2.7% and a 42.74% success rate on recommended stocks.

In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $42.00 price target.