Patrick Wood, an analyst from Morgan Stanley, maintained the Sell rating on Staar Surgical (STAA – Research Report). The associated price target remains the same with $23.00.
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Patrick Wood has given his Sell rating due to a combination of factors impacting Staar Surgical’s performance, particularly in the Chinese market. The company’s fourth-quarter earnings were weaker than expected, largely because of significant declines in China sales, which dropped 82% year-over-year. This downturn is attributed to ongoing macroeconomic uncertainties and low consumer confidence in the region. Additionally, a substantial order to a Chinese distributor was not recognized due to pending payment, further complicating the financial outlook.
Despite some positive developments in the U.S. market, with a notable 22% growth, these gains are overshadowed by the struggles in China. The elevated inventory levels with Chinese distributors and the limited visibility into market recovery contribute to a lack of confidence in future sales. The company’s guidance for 2025 reflects this uncertainty, with a broad range of potential outcomes for China sales. Thus, the overall outlook remains challenging, prompting the Sell rating from Patrick Wood.
Based on the recent corporate insider activity of 17 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of STAA in relation to earlier this year.