What we think about STAAR Surgical (STAA)
STAAR Surgical in Three Words: Focused, Proprietary, International
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Background
As the global leader in implantable collamer lenses, STAAR Surgical is bringing the world back into focus.
Professional ophthalmologists (eye doctors) place its ICLs between the iris and the natural lens of a patient’s eyes to permanently correct vision disorders. The procedure is painless, requires no expensive equipment, and only takes around 15 minutes.
Patients love the results. They generally report perfect vision within an hour and have collectively given a 99.4% approval rating after more than one million procedures. ICLs are flexible, undetectable, offer UV protection, and can even be removed later on if the patient desires.
STAAR’s ICLs are available in 75 countries and are approved and regulated as implantable Class III medical devices. After four decades of iteratively improving its IP, the company now has 357 patents protecting its proprietary materials.
94% of its sales come from outside of the US. China is its largest and most important market, accounting for around half of total revenue. And while the price paid by the eye doctors for the lenses varies by market, STAAR’s average global pricing is $1,050 per pair of ICLs.
Pricing also varies for the patients, but the average price paid by patients in the US for EVO lens implants is $8,680 for the entire procedure. This is an elective surgery that is paid for out of pocket and is very rarely covered by insurance.
STAAR Surgical was founded in 1982 and is headquartered in Lake Forest, California. It has 900 employees and generated $284 million in revenue during fiscal 2022.
Thoughts on Valuation and Capital Allocation
I recently built a Discounted Cash Flow valuation model for STAAR and came up with a fair value of $34 per share.
That suggests that its stock is currently around 41% undervalued.
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Deep Dive Presentation:
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As the global leader in implantable collamer lenses, STAAR Surgical is bringing the world back into focus.
Professional ophthalmologists (eye doctors) place its ICLs between the iris and the natural lens of a patient’s eyes to permanently correct vision disorders. The procedure is painless, requires no expensive equipment, and only takes around 15 minutes. Patients love the results. They generally report perfect vision within an hour and have collectively given a 99.4% approval rating after more than one million procedures. ICLs are flexible, undetectable, offer UV protection, and can even be removed later on if the patient desires.
STAAR’s ICLs are available in 75 countries and are approved and regulated as implantable Class III medical devices. After four decades of iteratively improving its IP, the company now has 357 patents protecting its proprietary materials.
94% of its sales come from outside of the US. China is its largest and most important market, accounting for around half of total revenue. And while the price paid by the eye doctors for the lenses varies by market, STAAR’s average global pricing is $1,050 per pair of ICLs.
Pricing also varies for the patients, but the average price paid by patients in the US for EVO lens implants is $8,680 for the entire procedure. This is an elective surgery that is paid for out of pocket and is very rarely covered by insurance.
STAAR Surgical was founded in 1982 and is headquartered in Lake Forest, California.