Analyst Reiterates This Ophthalmology Device Stock On Steep But Attractive Risk/Reward

Needham analyst expects the U.S. ICL market of more than $2.4 billion, despite some investors considering the market to be niche, with STAAR Surgical Company STAA becoming a major player in this category over time.
Assuming a prevalence of around 4%, the analyst estimates 13.3 million high myopes in the U.S. With procedural pricing (to the consumer) up to $6K per eye, Needham believes the procedure is positioned for affluent consumers.
With STAAR's EVO lenses pricing at $950 in the U.S., Needham estimates a total addressable market of $2.4 billion, with labeling including patients up to -3.0 diopters that could upside the estimates.
The analyst also writes that although LASIK is the leading refractive error correction procedure, it is much less effective, starting from -6 to -10 diopters.
Given EVO's enhancements relative to the prior-gen lens, increasing consumer awareness, and broader surgeon adoption, the ICL could help expand the market to include the under-served high myopia segment.
Given STAA's revenue growth and margin profile, shares have generally traded at a premium to its small/mid-cap growth peer group, leading the analyst to believe the risk/reward remains favorable, thus reiterating the Buy rating.
Price Action: STAA shares are down 4.52% at $69.27 on the last check Tuesday.