Needham Sees Clear View Into STAAR Surgical's Durable Double-Digit Revenue Expansion

Needham is initiating coverage on STAAR Surgical Company STAA with a Buy rating and an $87 price target.
The analysts note that FDA approval of STAA's EVO Implantable Collamer Lens (ICLs) should serve as a meaningful tailwind for revenue.
The Company generates most of its revenue from outside US markets. But after the FDA approval for the next-gen EVO lens, Needham estimates a mid-2022 US EVO launch could add ~240 bps, ~380 bps, and ~300 bps to 2022, 2023 2024 revenue growth, respectively.
"We believe STAA's OUS business has a durable >20% growth profile driven by continued OUS market penetration and an OUS presbyopia ICL launch," the analysts added.
STAAR Surgical has a high gross margin (77.5% in 2021), and Needham estimates EVO in the US could carry a gross margin over 85%, given higher pricing.
Needham is bullish on STAA's financial model, which has significant leverage potential translating into strong earnings growth.
Price Action: STAA shares are down 2.72% at $70.42 during the market session on the last check Friday.

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