Cynosure: Worth a Shot on the Long Side

Jefferies is out with a nice call on Cynosure (NASDAQ:CYNO) this AM, reiterating their Buy rating and $60 target saying they would be aggressive buyers at current levels.

Firm notes CYNO shares have declined ~20% since the company reported impressive 3Q results on unwarranted fears associated with a deceleration in the aesthetic laser market. They recently met with CYNO management and came away very upbeat about the overall tone of business and the state of the laser aesthetics market.

Jeffco maintains their belief that Cynosure should outperform the laser industry's 20–25% growth rate, and, based on physician channel checks, they do not believe that CYNO has seen any deceleration in sales for any of their product offerings. In fact, based on other laser company's reported CY3Q results, they believe that CYNO is taking massive share in the core laser market and is outperforming its competitors in all segments.

They remind investors that CYNO is only generating Smartlipo sales in North America at present and the explosive growth to-date has not included the OUS market opportunity (which tey believe is as large as the North American opportunity).

Notablecalls: Note that Jeffco's target represents almost 100% upside from current levels. That's bound to generate interest. Also, the comments regarding CYNO taking share and seeing no ASP pressure should reassure investors that the co is not getting hit by the weakening economy.

CYNO looks and sounds like a really strong story here. Definitely worth a shot on the long side.