Glaucoma Player Sight Sciences Stock Falls More Than 30%: Analyst Warns Of Lingering Concerns Over Coverage

Sight Sciences Inc SGHT shares are trading lower after the company issued third-quarter total revenue guidance below estimates and cut full-year 2023 revenue guidance below estimates.

Sight Sciences lowered FY23 revenue guidance from $89 million-$94 million to $80 million-$82 million versus the $92.12 million estimate. 

Q3 revenue is anticipated to be between $19 million and $20 million versus the $23.72 million estimate.

The management attributed the roughly 17% sequential sales decline to impacts from the proposed local coverage determinations (LCDs) on June 2 that classified other tissue-removal devices, such as Sight’s OMNI device, as investigational for the treatment of glaucoma. 

Although the LCD has not been officially approved, management has acknowledged a temporary uncertainty affecting glaucoma customers due to the proposal. 

Consequently, the company has witnessed decreases in new accounts and year-over-year declines in utilization from existing accounts.

Given the uncertainty surrounding reimbursement and the potential for multiple quarters of reduced utilization, William Blair has downgraded the stock to the Market Perform rating from Outperform. 

In the short term, analysts Margaret Kaczor and Macauley Kilbane anticipate that there will be lingering concerns related to the proposed LCDs. 

If the LCDs are not approved, the company might require several quarters to recover from the decline in utilization, affecting both new and existing accounts. 

Price Action: SGHT shares are down 37.20% at $4.10 during the premarket session on the last check Tuesday.