STAA

As STAAR Surgical ($STAA) Shares Plunge 63%, Major Shareholder Accumulates $17.9 Million Worth of Stock Over Four Months

03/28/2025 22:49

As shares of ophthalmological device manufacturer STAAR Surgical ($STAA) have experienced a steep decline over the past six months, major shareholder Broadwood Partners has been aggressively buying shares, attracting significant investor attention. $STAA's stock price has plummeted approximately 63% from around $47 in July 2024 to approximately $17 by March 2025. Particularly notable was the sharp 25% single-day drop on February 12, 2025, when the share price fell from $21.88 to $16.48. Despite this weakness, major shareholder Broadwood Partners has been consistently increasing its stake throughout this downturn. STAAR Surgical specializes in manufacturing Implantable Collamer Lenses (ICL), medical devices used for vision correction of myopia, hyperopia, and astigmatism. Their ICL technology offers an alternative to LASIK surgery by placing a lens inside the eye without cutting the cornea, a method gaining popularity in refractive surgery markets globally. Broadwood Partners has conducted an intensive stock purchasing campaign from December 2024 through March 2025. Most notably, during February 2025's significant price decline, Broadwood acquired approximately 410,000 shares worth about $3.13 million. This was followed by an even larger purchase of approximately 880,000 shares in March, representing an additional investment of roughly $7.93 million. This pattern demonstrates a strategy of increasing purchase volumes as the share price declines further. According to insider trading disclosures, both Broadwood Partners and related reporting party Neal C. Bradsher are listed as direct beneficial owners in these transactions. This strongly suggests that Broadwood Capital and Neal C. Bradsher maintain strong conviction in the company's long-term value proposition. Examining STAAR Surgical's recent financial situation reveals that while the company generated $313.9 million in revenue for fiscal year 2024, it recorded a net loss of $20.21 million—a reversal from profitability in the previous year. The company cited weak macroeconomic conditions in China, a key market, as the primary cause for this underperformance. On the positive side, STAAR Surgical maintains a debt-free balance sheet with $230.49 million in cash, indicating strong financial health. The company also boasts an impressive gross margin of 76.3%, suggesting its underlying profitability potential remains intact. In its Q2 2024 earnings announced in August 2024, the company reported adjusted earnings of $0.15 per share, falling short of the expected $0.24, though revenue came in at $99.01 million, exceeding the anticipated $95.20 million. However, disappointing guidance released in mid-February 2025 triggered the significant share price decline. Industry experts suggest that STAAR Surgical's performance could improve significantly if economic conditions recover in China, its primary market. Additionally, Broadwood Partners' concentrated buying activity could be interpreted as a signal that the current share price substantially undervalues the company's intrinsic worth. Analyzing STAAR Surgical's competitive position within the industry, its ICL technology offers advantages over LASIK surgery, including faster recovery and less corneal damage. Furthermore, global trends of aging populations and increasing demand for vision correction procedures are expected to create favorable long-term conditions for the company. Current analyst consensus for $STAA remains 'buy,' with a median price target of $52.64, suggesting approximately 200% upside potential from current levels. However, this outlook dates from August 2024 and may not fully incorporate recent share price declines and performance challenges. In conclusion, while STAAR Surgical currently faces headwinds from weakness in the Chinese market and recent performance issues that have driven its stock price down significantly, several positive factors remain: aggressive insider buying by a major shareholder, debt-free operations, substantial cash reserves, and high gross margins. Investors should closely monitor potential recovery in the Chinese market and the company's cost efficiency efforts moving forward.

You can receive notifications when news is published.