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Bull Of The Day: Cutera (CUTR)

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Cutera (CUTR - Free Report) is a Zacks  Rank #1 (Strong Buy) and its CoolGlide family of products has propelled it to some impressive growth and solid earnings. Let’s take a deeper look at this stock in this Bull of the Day article.

Description

Cutera Inc designs, develops, manufactures and markets the CoolGlide family of products for use in laser and other light-based aesthetic applications. The original CoolGlide CV provides permanent hair reduction on all skin types.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For CUTR, I see a great history of beating the Zacks Consensus Estimate.  There are four beats over the last four quarters.

The average positive earnings surprise over the last fours quarters works out to be 437%, which means the company is consistently posting triple and quadruple the Zacks Consensus Estimate

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher.  For CUTR, I see estimates moving higher.

Over the last 60 days, I see a few increases.

This quarter has moved from $0.09 to $0.08.

Next quarter has moved from $0.14 to $0.11.

The full-year number has increased from $0.33 to $0.58 over the last 60 days.

Next year is at $0.75 and that is up from $0.71 over the same time horizon.

Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).

Valuation

The valuation for CUTR is on the high end, but with growth like this you would expect investors to pay up.  I see an 80x forward earnings multiple and sales growth in the most recent quarter coming in just over 122%.  The price to book multiple of 15x is above the industry average of 11x.  Price to sales comes in at 4.2x and again this is well below the industry average of 114x. 

Cantor Starts With Overweight

On June 2 Cantor Fitzgerald started coverage of CUTR with an Overweight rating and a price target of $55.  They see topline growth driven by category leadership in body sculpting and acne, recurring revenues and broad industry tailwinds.  The analyst also sees margin improvement over the next few years.

Chart

 

Cutera, Inc. Price, Consensus and EPS Surprise

Cutera, Inc. Price, Consensus and EPS Surprise

Cutera, Inc. price-consensus-eps-surprise-chart | Cutera, Inc. Quote


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