Key Points
It's recently commercialized VIZZ hasn't generated much fizz with the market yet.
It has high hopes for the blurry vision treatment.
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According to data compiled by S&P Global Market Intelligence, Lenz Therapeutics (NASDAQ: LENZ) fell by just under 20% over the course of this trading week. Investors were in a bearish mood following a disappointing earnings report from the specialty healthcare company. This was exacerbated by aggressive price target cuts from two prominent banks.
Two significant misses
On Tuesday morning, Lenz published its fourth-quarter and full-year 2025 results. These revealed that the company earned revenue of just under $1.59 million for the former period. As its first commercial product, VIZZ, won Food and Drug Administration (FDA) approval last October, that figure compared exceedingly well to the fourth quarter 2024 result of $0.
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Commercialization entails costs, however, which is a key reason Lenz's net loss under generally accepted accounting principles (GAAP) deepened considerably. It came in at nearly $35.9 million ($1.16 per share), compared with the year-ago quarter's deficit of $12.7 million.
Analysts were expecting better for both metrics. Their collective estimate for revenue was $3.1 million, and for non-GAAP (adjusted) net loss, $0.90 per share.
The following day, not one but two of the "Big Four" U.S. banks reduced their fair value assessments on Lenz. Citigroup's Yigal Nochomovitz cut his estimate in half, to $26 per share from $52. Jason Gerberry of Bank of America Securities was more moderate in his price target cut, lowering it to $29 per share from $35.
Clear potential
I don't think this is necessarily a head-for-the-exits situation for Lenz. Any therapy new to the market can take some time to gain traction, particularly for a niche company like this. I feel that VIZZ, which treats a blurry near vision affliction called presbyopia, can appeal to a large patient population. Personally, I'd give Lenz a little more time to gauge how effectively it's marketing the product.
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Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
