Is Cynosure’s Stock Still a Buy After This Big News?

With shares of Cynosure (NASDAQ:CYNO) trading at around $24.44 is CYNO an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Cynosure’s stock had a big run-up yesterday after the FDA approved PicoSure, a new tattoo removal workstation that also has the ability to remove benign pigmented lesions. Cynosure is on quite a roll considering their anti-wrinkle device was approved only five months ago.

PicoSure will be sold to dermatologists and plastic surgeons around the world. This is big news considering Cynosure states that 20% of people with tattoos want their tattoos removed. The effectiveness of PicoSure is also excellent. PicoSure has proven to remove 80% of all tattoos. It has also proven to remove 94% of blue and green ink. The only potential negative here is that the study was only based on 22 participants.

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It seems as though Cynosure is only getting started. This company also has laser and light-based energy sources to treat hair removal, unwanted fat, cellulite, anti-aging, and more. That probably covers at least half the population. Yes, that’s on a global scale. The market here is enormous.  

E = Equity to Debt Ratio Is Strong

If you’re looking for negatives for Cynosure, you will likely find one or two, but it’s not going to be in debt-to-equity or on the balance sheet. Let’s take a look at Cynosure as well as two other companies in the industry, which are GenMark Diagnostics (NASDAQ:GNMK) and ZELTIQ Aesthetics (NASDAQ:ZLTQ).

Debt-To-Equity

Cash

Long-Term Debt

CYNO

.00

$79.48 Million

$807 Thousand

GNMK

.02

$53.55 Million

$919 Thousand

ZLTQ

N/A

$51.19 Million

$0

 

T = Technicals on the Stock Chart Are Strong

Cynosure has been on a tear over the past three years. While there have been some speed bumps, the trend has been up. With new approvals and a large untapped market, this trend should continue barring an economic collapse.

1 Month

Year-To-Date

1 Year

3 Year

CYNO

-14.12%

99.15%

95.17%

125.2%

GNMK

14.24%

135.70%

96.56%

-2.11%

ZLTQ

-21.15%

-61.27%

-68.12%

-2.44%

 

At $24.44, Cynosure is currently trading slightly lower than its 50-day SMA of $25.12. It’s also trading slightly lower than its 100-day SMA of $25.16. And it’s trading significantly higher than its 200-day SMA of $17.13.