Cantor starts Cutera at OW; PT $55


Cantor Fitzgerald initiated coverage of Cutera (NASDAQ:CUTR) with an “overweight” rating and 12-month price target of $55. The stock closed at $40.86 on June 1.

“Cutera’s comprehensive portfolio of innovative aesthetic solutions for the global market is underappreciated, in our view,” writes analyst Louise Chen, adding that the company is still in the “early innings of a value creation story.” 

As a result, “we think upwards earnings estimate revision[s] in 2021-plus should move the stock higher,” she added. 

This could be driven by significant as well as compelling top-line growth drivers, including category leadership in body sculpting and acne; recurring revenues and industry tailwinds; improving gross margins from 53% in 2020 to low-to-mid 60% by about 2022; continuing to increase operating leverage to drive even greater profitability; and customer recovery from the pandemic, Ms. Chen said. 

Cutera is solely focused on energy-based aesthetics. The company builds capital equipment, treats patients, and delivers consumables. As Cutera is vertically integrated, it designs, develops and sells its own products.