Stifel starts Cutera at hold; PT $55


Stifel initiated coverage of Cutera (NASDAQ:CUTR) with a “hold” rating and price target of $55. The stock closed at $54.60 on April 16.

Cutera develops and manufactures products used various aesthetic procedures, including benign pigmented lesion removal, treatment of vascular conditions, hair removal, skin rejuvenation, women's health, body contouring, skin resurfacing, and tattoo removal.

“Our physician checks are solid with feedback from recent truSculpt 3D adopters pointing to high user satisfaction and increasing procedural utilization,” writes analyst Jonathan Block.

In addition, he said a separate set of randomized industry diligence highlights the quality of Cutera’s product portfolio relative to its bigger aesthetic peers.

Despite the positive feedback, Mr. Block said Cutera’s stock rallied considerably in 2017, and “we believe it will take the company time to ramp recurring revenue as a percent of total sales.”

In the coming quarters, he expects truSculpt’s “capital sales to continue to grow, high margin procedural utilization to ramp, and some of the company's newer initiatives (service revenue growth, new product platforms) to take hold before potentially becoming more positive on Cutera's story.”