Investing.com -- Shares of RxSight (NASDAQ: RXST) plummeted 40% following the company’s announcement of preliminary first quarter 2025 revenue and a downward revision of its full-year guidance for the same year. This significant drop comes as the ophthalmic medical device company grapples with challenges within the premium intraocular lens (IOL) market and broader economic concerns.

The preliminary revenue for the first quarter is estimated at $37.9 million, a 28% increase YoY, but a 6% decline from the fourth quarter of 2024. The company attributed this decline to a variety of factors, including a 36% increase in the sale of Light Adjustable Lenses and a 43% expansion of the installed base of Light Delivery Devices compared to the first quarter of the previous year. Despite these gains, RxSight’s CEO and President, Dr. Ron Kurtz, acknowledged the need to navigate market headwinds that have become more pronounced as the company’s commercial footprint has grown.

For the full year of 2025, RxSight has revised its revenue guidance to a range of $160.0 million to $175.0 million, down from the previous forecast of $185.0 million to $197.0 million. This adjustment represents an implied growth of 14% to 25% compared to 2024. Operating expenses are also expected to increase by 10% to 18% compared to 2024, with non-cash stock-based compensation expenses projected to be higher than initially anticipated.

BofA Securities analyst Craig Bijou downgraded RxSight from Buy to Underperform and reduced the price target from $36.00 to $22.00. "We expect the stock to be under pressure today as the size of the miss and the lower guide likely surprised investors," Bijou stated. Concerns about potential market saturation, the volume contribution from new device installations, and management visibility have led to a more cautious outlook for the company’s performance.

BTIG analyst Ryan Zimmerman, while maintaining a Buy rating, lowered the price target on RxSight to $28.00 from $44.00. Zimmerman pointed to a range of factors contributing to the weaker-than-expected results and emphasized the need for RxSight to demonstrate improved performance against the reduced guidance to regain investor confidence.

As RxSight prepares to announce complete, unaudited financial results for the first quarter on May 7, 2025, investors and analysts will be closely monitoring the company’s ability to navigate the current market challenges and deliver on its revised expectations.

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