Iridex To Benefit From New Revolutionary Glaucoma Treatment

Jan. 11, 2021 9:28 AM ETIRIDEX Corporation (IRIX)GKOS32 Comments
Analystman profile picture


  • Iridex Corp. seems to be at the initial stage of a growth inflection that could drive the stock up 175-625%.
  • IRIX has a commercial product which could revolutionize glaucoma treatment, with an addressable market of $1.2 bil+.
  • There are several catalysts to drive IRIX stock to fair value, including my projection of revenue growth as the company's system gains traction in the market.
  • Due to IRIX's small size, strong products, and undervaluation, I believe the company is a prime acquisition target.


Iridex Corp. (NASDAQ:IRIX) is a compelling buy, that I estimate could have 6-month upside potential of 175-625%, and longer-term upside of much more. IRIX represents a rare opportunity to own a high-growth under-the-radar stock, at a deep discount valuation. I believe the stock market has created a huge imperfection in IRIX’s valuation as evidenced by IRIX’s FYE20 Enterprise Value to Revenues (EV/R) of only 0.6x, versus its closest peer Glaukos Corporation (GKOS) at 13.8x. IRIX is an ophthalmic medical technology company, at a growth inflection, that has developed a revolutionary proprietary laser system to treat Glaucoma (Cyclo G6), with a total addressable yearly market (TAM) of $1.2 bil. The Cyclo G6 (G6) has significant advantages over competing treatments and is currently in the commercial ramp-up phase, with broad industry support and acceptance. I project G6 will drive significant 25%+ growth in revenues and cash flow for years to come. There are several near-to-long-term catalysts I expect to propel this stock to fair value, most notably I expect a significant revenue rebound as the company gains traction with its G6 system, and the Covid related weakness abates. Given the small size of IRIX, and the current management composition, I believe the company is being positioned for an eventual sale. Due to IRIX’s current depressed stock price, I would not be surprised to see an offer at any time, if the stock does not appreciate substantially.

Why Does This Opportunity Exist?

This dramatic under-valuation for IRIX exists for several reasons; 1) It is an underfollowed nano-cap; 2) Covid has temporarily depressed sales due to the decrease in non-essential procedures, masking the underlying strength of the company’s G6 product; 3) tax loss selling and end of year portfolio adjustments.

The Company

According to IRIX’s 10K, "IRIDEX Corporation is an ophthalmic medical technology company

This article was written by

Analystman profile picture
I am currently the Managing Member of DV Advisors, LLC. I have over 30 years of investment experience, and have worked at many of the world's top financial institutions and hedge funds in senior research and portfolio management positions.

Disclosure: I am/we are long IRIX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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