ZELTIQ Aesthetics (ZLTQ) Remains Top Small Cap Pick at Leerink Partners Amid Ample Growth Runway
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Leerink Partners analyst Richard Newitter reiterated an Outperform rating and $48 price target on ZELTIQ Aesthetics (NASDAQ: ZLTQ) calling it a Top Small Cap pick as they continue to see numerous drivers of both increased CoolSculpting (CS) system adoption and per system utilization.
Newitter said they have increased conviction that the non-invasive (NI) fat market is expanding and bigger than appreciated. Several items give them confidence here: (1) Despite increasing competition from Cynosure (CYNO-OP) and its success with SculpSure over the past four qtrs, ZLTQ is still generating record qtly system adds - suggesting the mkt is clearly large enough (and growing) as multiple players are experiencing accelerated adoption; (2) ZLTQ's growing pipeline of qualified system leads, which continues to grow/replenish and now sits at ~4K prospects (up from ~2.5K in 2013); and (3) more customer willingness to invest in the non-invasive (NI) fat category as evidenced by a still rising number of multi-system CoolSculpting (CS) accounts.
The firm said they see healthy upside potential to their North America forecasts within an increasing TAM, which management now pegs at 25K potential accounts (i.e., storefronts), up from 18K previously. ZLTQ’s penetration into this 25K account opportunity sits at just ~10%, the firm notes.
Shares of ZELTIQ Aesthetics closed at $37.54 yesterday.
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