Analysts are also bullish on this stock. It has an average recommendation of just 1.30 (buy), and an average price target of $36.75, which implies that the stock price could go up more than 20%. However, it should be noted that the analyst reports from which these averages are calculated are a bit dated (the most recent being from Oct. 2012), so take this information with a grain of salt.
The stock is currently at its 52-wk high, and is almost 77% above its 52-wk low of $16.88. Even though it has has a good run since early last year, the stock is still far from its 2007 peak of $43.50. Year-to-date, the stock has gained almost 24%, and there is no denying it has had excellent momentum these last months. As with the case of Align Technology, Inc. (NASDAQ:ALGN), the company pays no dividend, and has never done so.
Cynosure, Inc. (NASDAQ:CYNO)’s strength lies on the ability to deliver a number of treatments in one single laser platform. The demand for their products should keep increasing, as they cover hair removal, cellulite reduction, anti-aging, pigmentation, body-sculpting, and treatments for vascular lesions. They have also recently launched a new product, PicoSure, which can remove tattoos in a simple yet effective way. Q4 earnings were strong, beating analyst estimates (both in revenue and in EPS), increasing margins, and reporting a 25% growth in sales. Again, investors are willing to pay a premium for growth, as seen in the stock high valuation ratios, but as long as the company continues to deliver good results and growth, there is no reason the stock’s price should decline.
| P/E | Fwd P/E | PEG | Avg PT (% implied upside) | Mean Rec. | Div Yield | |
| AGN | 30.57 | 20.12 | 2.37 | $114.85 (+4.93%) | 1.80 | 0.18% |
| ALGN | 46.89 | 22.80 | 2.34 | $36.83 (+10.63%) | 1.70 | N/A |
| CYNO | 38.27 | 25.73 | – | $36.75 (+23.12%) | 1.30 | N/A |
| Edge | AGN | AGN | ALGN | CYNO | CYNO | AGN |
Bottom Line
All three companies are profitable and growth-driven. Their stocks are loved by investors and analysts, and their momentum is undeniable. However, as is the case with other growth stocks with high valuations, if a company reports a weak quarter, the stock price could suffer. At any rate, the three companies are in growing businesses, have attractive products, and will probably have a good 2013. After all, with a recovering economy consumers have more money, and many will spend part of it in reducing their wrinkles, aligning their teeth, or removing their spots.
The article 3 Health Stocks that Look Pretty originally appeared on Fool.com and is written by Alex Bastardas.
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