Stifel: Appreciate The Beauty Of MonaLisa, Buy Cynosure

• Shares of Cynosure, Inc. CYNO have risen 30 percent year-to-date.
• Stifel’s Jonathan Block has upgraded the rating on Cynosure from Hold to Buy, with a price target of $44.
• Block believes that the contribution of the MonaLisa Touch product to the company’s revenue growth would be much higher than expected.

MonaLisa Touch for vaginal atrophy was launched in December 2014 and has been ontributing $1-2 million per quarter. However, Block believes that MonaLisa revenue is now closer to $6-9 million and could add up to $30 million in 2015.

In addition, MonaLisa’s right has the potential to be expanded overseas, which could help to re-energize the company’s international growth. Also, “our diligence into Cynosure’s Proxy reveals development of a new flagship product is on target, and we believe scheduled for market introduction in 2016,” Block stated.

The conviction in MonaLisa’s significant contribution to Cynosure’s revenue growth is based on the product currently being offered in more than 200 locations, representing $20-25 million in sales. Also, El.En. Group's financial statements show that sales have been accelerating since 1Q15, following Cynosure distribution agreement.

The company is also scheduled to launch SculpSure and a new aesthetic workstation in 2016. However, the company’s base business is likely to remain flat in 2016.