How likely is a settlement versus a court‑ordered judgment, and what are the estimated settlement amounts?

Likelihood of a settlement vs. a court‑ordered judgment

In U.S. securities class‑action cases, the historical pattern is that ≈ 80‑90 % of disputes end in a settlement rather than a full trial and court‑ordered judgment. Plaintiffs and defendants alike prefer to avoid the pro‑tracted costs, uncertain jury verdicts and the negative publicity that a trial generates. For a publicly‑traded company such as RxSight (RXST), management will be especially motivated to resolve the matter quickly to protect the brand, limit dilution of equity and prevent a potentially larger, precedent‑setting judgment that could trigger further litigation. Consequently, the market will price the event assuming a settlement is the most probable outcome.

Estimated settlement size

While the filing does not disclose the alleged damages, comparable biotech and ophthalmic‑device class actions over alleged misstatements or product‑performance issues have historically produced settlements in the low‑to‑mid‑single‑digit‑million‑dollar range (e.g., $5 M–$15 M). Given RxSight’s market cap (≈ $1.2 B) and the fact that the lawsuit is being announced by a mid‑size firm (Pomerotis LLP) rather than a “big‑ticket” plaintiff, the likely exposure is modest. Analysts therefore tend to model a $7 M–$12 M settlement as a baseline, with a downside scenario of a $20 M+ judgment if the case proceeds to trial and the jury finds the company liable for more severe misrepresentations.

Trading implications

• Short‑term reaction: Expect a modest sell‑off on the news—historically 2‑4 % of the float—as investors price in the probability of a settlement cost.
  
• Positioning: A short‑term neutral‑to‑slightly‑bearish stance (e.g., a small‑size short or a protective put) can capture the immediate downside while preserving upside if the settlement is capped at the estimated range.
  
• Catalyst watch: Any subsequent press release from RxSight indicating a settlement agreement (or a court‑ordered judgment) will be a decisive catalyst. A settlement announcement near the low‑mid‑million estimate should trigger a bounce‑back of 3‑5 %, whereas a judgment exceeding $20 M could drive a broader decline of 6‑10 %.
  

In summary, the market should treat a settlement as the high‑probability, low‑to‑mid‑million‑dollar outcome and price the stock accordingly, while remaining vigilant for a potential judgment that would materially reshape the risk/reward profile.