Why Zeltiq Aesthetics Inc. Shares Skyrocketed
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Zeltiq Aesthetics , a medical device company focused on developing non-invasive products for the reduction of fat, soared as much as 43% after reporting much better-than-expected third-quarter results and boosting its full-year forecast.
So what: For the quarter, Zeltiq reported a whopping 64% jump in revenue to $29.5 million aided by improved sales and cycles of its CoolSculpting non-invasive fat reduction device used in cases where diet and exercise don't work. Zeltiq also narrowed its loss to just $0.08 per share. By comparison, the Street had been projecting a loss of $0.19 per share on just $21.6 million in sales. Looking ahead, Zeltiq doubled its full-year revenue growth forecast to 40% from 20%, implying sales of $106.7 million for the year, and boosted its gross margin projection to 69% from 67%. This is the second-time in two quarters that Zeltiq has doubled its growth forecast, as it was pegged at just 10% prior to the second quarter! The consensus estimate for the full year on the Street was just $92.5 million prior to Zeltiq's update.
Now what: Wow, was that a drubbing of analyst's expectations! What we're seeing here is just how popular any non-invasive surgical option is to lose weight, or at least improve our appearance. With 35.7% of the nation considered obese and two-thirds considered cumulatively to be overweight or obese, the market for fighting unwanted extra weight is huge. Zeltiq is really just in the beginning stages of its development and, while not profitable yet, should be profitable by next year if growth continues at this pace and gross margins head higher. I would certainly suggest adding this company to your watchlist moving forward.
Another company with incredible growth prospects
If you think Zeltiq's growth rate is impressive, then you need to check out this incredible tech stock which is growing twice as fast as Google and Facebook, and more than three times as fast as Amazon.com and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!
The article Why Zeltiq Aesthetics Inc. Shares Skyrocketed originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
