VISX was pummeled from a high of 100 or so to under 20 due to a confluence of adverse events: (1) the ITC declined to ban a competitor's laser from the USA in a patent dispute, (2) they experienced flat sequential earnings growth, and (3) they cut their royalty dramatically?
Nevertheless, VISX recently received encouraging news from the US patent office regarding a reexamination of one of their patents. Should it turn out that VISX has blocking patents on all competing lasers, they could theoretically extract royalties for all laser procedures. If so, the stock's fair value would be nearly ten-fold from where we are. Sounds like another interesting stock: RMBS.
Even if they were not to prevail on the patent issue, VISX's products are entering the growth phase of the "S curve," and should benefit from widespread adoption of laser eye surgery.
What do you think and know about their prospects?
Prophet |
