Is Lumenis (Nasdaq:LUME) getting back on track? Looks like it, if you ask UBS Warburg analyst Stephen Levey, who has started coverage of the company with a Buy rating and a price target of $5.75, 17% above its market level. Which does not mea Lumenis doesn't have problems, which he lists at length: earnings warnings, a Securities and Exchange Commission probe, a badly implemented merger, a suffering share price, a surfeit of writeoffs and one-time charges, and oddly frequent changes of chief financial officer. But Levey sees light at the end of the tunnel and advice on what Lumenis should do to restore investor confidence, including meetings its 2002 guidance, not changing its estimates for the farther future, paying bond-holders their due in full, and completing its working capital plan with Bank Hapoalim. It must cooperate with the SEC and finish melding with the lasers division of Coherent, CMG. It sounds like a long row to hoe, but unless Lumenis complies, Levey concludes, his recommendation will be cut and the market will punish it soundly. Among its advantages are Lumenis' leading position in its market. Granted the company faces plenty of problems, Levey admits, but the pertinent question is whether it can overcome them. He notes that it met its second-quarter forecasts, that its technology involves no hype and that it has a clear business model. On the company's debt structure, he notes its $160 million debt. In September it is scheduled to pay bondholders $70 million. The company has an agreement with Bank Hapoalim. Levey does not believe the bank will renege. Levey estimates that Lumenis will post sales of $372 million this year, about the same as in 2001, with cosmetic devices providing the lion's share. He sees 27-cent earnings per share for 2002 - $10 million, rising to 89 cents per share in 2003 - $32.9 million. Lumenis develops and produces laser and light-pulse devices for medical and cosmetic uses. The company is traded on Nasdaq at a market value of $180 million. Levey estimates that the company's lasers commands 37% of the lasers market, 17% of the ophthalmic market, 37% of the plastic surgery market and 30% of the dental market.