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Bull of the Day: Cutera (CUTR)

Madeleine Johnson

Cutera Inc. (CUTR) is a company that designs, develops, manufactures, and markets the CoolGlide family of laser products. The original CoolGlide CV provides permanent hair reduction on all skin types, and the second generation CoolGlide Excel added the capability to treat a variety of vascular lesions like telangiectasia, spider and reticular leg veins. CoolGlide Vantage added non-ablative skin therapy to the company’s range of applications.

Q2 Earnings Fly Past Expectations

Overall, Cutera had a great second quarter. Revenue of $48 million beat our consensus estimate and rose 12% year-over-year, marking the highest sales level in the company’s history. Earnings of $0.04 per share easily beat the Zacks Consensus of a loss of 16 cents, with net income of $0.6 million.

The company saw strong growth internationally—revenue grew 36% year-over-year in its international segment—and nice gains across Japan, Europe, and Asia all contributed to Cutera’s growth this past quarter.

As a result, CUTR shot up 34% after releasing its Q2 earnings.

Cutera, Inc. Price and Consensus
Cutera, Inc. Price and Consensus

Year-to-date, CUTR is up nearly a whopping 90%. Estimates have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).

For the current fiscal year, Cutera’s earnings growth is expected to rise almost 73% year-over-year. Two analysts have revised their estimate upwards in the past 60 days, and the Zacks Consensus Estimate has jumped 16 cents higher from three cents to 19 cents per share during the same time frame.

2020 looks strong too, and earnings could see growth of roughly 116%; next year’s consensus estimate sits at 41 cents per share, with one upward revision in the last 60 days (though one analyst cut their estimate during the same time frame).

Bottom Line

Cutera has a new CEO at the helm, David Mowry, and he said in the company’s news release that he is confident “there are multiple pathways to sustain above-market growth, enhance the Company’s profitability, and be the supplier of choice in these exciting and growing markets.”

Looking ahead, Cutera looks to have a solid rest of the year ahead of it. It expects revenue to fall in the range of $165 to $175 million, reflecting a 2%-8% increase over 2018. Gross margin is also expected to expand compared to last year’s, while adjusted EBITDA is projected to be between $2 million and $4 million.

If you’re an investor looking for a computer and technology stock to add to your portfolio, make sure to keep CUTR on your shortlist.

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