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Staar Surgical shares fall on weak revenue estimate
(Reuters) - Shares of Staar Surgical Co lost more than a fifth of their value after the company estimated second-quarter revenue below analysts' expectations.
Staar's stock was down about 21 percent at $6.37 on Friday on the Nasdaq, its biggest single-day percentage drop in three-and-a-half years. It touched a low of $6.19 earlier in the day.
At least two brokerages cut their price targets on the stock citing weak sales outlook for Staar's Visian ICL lenses.
The company's full-year outlook of 15 percent revenue growth and 32 percent growth in Vision sales was ambitious, especially after its first-quarter sales missed expectations, Canaccord Genuity analyst Jason Mills said in a note to clients.
The analyst said he expects the company to lower its full-year outlook when it reports second-quarter results on August 1. He cut his price target on the stock to $10.50 from $14.00.
The transition to a direct-delivery model hurt Visian ICL sales in Spain, while uptake in Korea -- its largest market -- was also lesser than anticipated, Staar said on Thursday.
Analyst Mills said the company's previous distributor in Spain did not re-order ICL lenses and the company bought back some inventory from the distributor.
Staar, however, expects the new model to show benefit in the second half of the year.
Benchmark analyst Raymond Myers attributed lower sales to the "increasingly difficult global economic climate," and cut his price target on Staar's stock to $10 from $12.50.
"With approximately 80 percent of sales outside of the United States, we feel it is unlikely that Staar can avoid some impact to growth," he said.
However, Myers said the drop in share price was "an outstanding buying opportunity" as weakness in the company's second quarter is transitory.
(Reporting By Pallavi Ail in Bangalore; Editing by Roshni Menon)
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