Procept faces securities fraud suit after 18% stock plunge

Kahn Swick & Foti filed a securities fraud class action against Procept (NASDAQ: PRCT) over undisclosed inventory issues tied to an 18 percent stock decline.

"Procept's undisclosed discount program had artificially and unsustainably inflated the Company's reported U.S. handpiece unit sales and revenues by pulling forward sales at the expense of future periods," the complaint filed in the U.S. District Court for the Northern District of California alleges.

Procept disclosed on Feb. 25 that handpiece sales exceeded procedures in every quarter since the first fiscal quarter of 2023, creating more than 10,000 excess units in field inventory. U.S. handpiece unit sales fell from 13,225 in the third quarter to 9,400 in the fourth quarter, a sequential decline of nearly 30 percent, causing the company to miss its annual revenue guidance by tens of millions of dollars.

Shares fell from $27.84 on Feb. 25 to $22.69 on Feb. 27, a decline of more than 18 percent over two days on above-average volume. Investors who purchased Procept shares between Feb. 28, 2024 and Feb. 25, 2026 have until Sept. 22 to file lead plaintiff applications in the case, Operating Engineers Construction Industry and Miscellaneous Pension Fund v. PROCEPT BioRobotics Corporation, No. 26-cv-07691.

The lawsuit charges Procept and certain current and former executives with violating the Securities Exchange Act of 1934. The complaint alleges the company used an extensive discount program to incentivize customers to place bulk orders exceeding procedure demand, artificially inflating reported sales and revenue. Robbins Geller Rudman & Dowd also filed a related class action, and The Gross Law Firm has issued investor notices for the same class period.

Earlier disclosures foreshadowed the inventory problem. On Aug. 6, 2025, Procept reported Q2 handpiece sales of approximately 12,750 units and guided Q3 shipments to about 13,350 units, below consensus estimates of more than 13,840. The stock fell 16 percent over two days. On Nov. 4, 2025, the company cut its annual handpiece sales guidance by 1,000 units to 52,000, and shares dropped more than 10 percent.

Procept is a surgical robotics company that develops the AquaBeam Robotic System and HYDROS Robotic System for minimally invasive urologic surgery, primarily targeting benign prostatic hyperplasia. The company's market capitalization stood at approximately $949 million following the decline.

The lawsuit's outcome could affect Procept's ability to raise capital and its standing with institutional investors. The next event to watch is the Sept. 22 lead plaintiff deadline, which will determine which firm directs the litigation.

This article is for informational purposes only and does not constitute investment advice.