Cynosure Inc. Class A Stock Upgraded (CYNO)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Cynosure Inc. Class A (Nasdaq: CYNO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • CYNO's very impressive revenue growth greatly exceeded the industry average of 25.4%. Since the same quarter one year prior, revenues leaped by 74.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CYNO's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.55, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 82.0% when compared to the same quarter one year prior, rising from $4.04 million to $7.35 million.
  • CYNOSURE INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CYNOSURE INC swung to a loss, reporting -$0.20 versus $0.78 in the prior year. This year, the market expects an improvement in earnings ($1.29 versus -$0.20).
  • The gross profit margin for CYNOSURE INC is rather high; currently it is at 58.79%. Regardless of CYNO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.85% trails the industry average.

Cynosure, Inc. develops, manufactures, and markets aesthetic treatment systems primarily to the dermatology, plastic surgery, and general medical markets. Cynosure Inc. Class A has a market cap of $621.2 million and is part of the health care sector and health services industry. Shares are up 10.4% year to date as of the close of trading on Friday.

You can view the full Cynosure Inc. Class A Ratings Report or get investment ideas from our investment research center.

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