Piper Jaffray Starts Zeltiq At Overweight, Sees Upside Of $35/Share

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In a report published Monday, Piper Jaffray analyst Matt O'Brien initiated coverage of Zeltiq Aesthetics Inc ZLTQ with an Overweight rating and price target of $35. The analyst believes that the company sells the "best body contouring technology," despite the entrance of several competitive products in the market.

"The company and its competitors have lightly penetrated the existing worldwide opportunity for body contouring, which we think provides a meaningful runway for top-line growth in the coming years," O'Brien stated.

Given the meaningful market opportunity, several companies have been trying to launch their own body contouring products. However, the analyst believes that CoolSculpting, from Zeltiq Aesthetics, is currently the best option, given that it entails low pain levels while being highly effective. It also requires minimal physician involvement.

In an attempt to strengthen its market position, the company is working on launching new technologies, along with new application, from Q4 onwards. "The company is introducing a new applicator, which will essentially cut procedure time in half, making ZLTQ's technology as fast as anything on the market," according to the Piper Jaffray report.

The analyst believes that Zeltiq Aesthetics has the ability to deliver more than 20 percent top line growth and margin expansion in the coming years, which makes the stock "one of the more compelling names in med tech."

The analyst expects 15 percent upside from the current stock valuation levels.

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Posted In: Analyst ColorInitiationAnalyst RatingsPiper Jaffray
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