ZELTIQ Is The Leader In Non-Invasive Fat Reduction, Says Aegis

Aegis Capital’s Difei Yang believes Zeltiq Aesthetics Inc (NASDAQ: ZLTQ) is well positioned to take “the lion’s share” of the developing body contouring space globally and sees large market opportunity for the company’s “standard setting” product, CoolSculpting.

Yang initiated coverage of the company with a Buy rating and price target of $51.

Market Leader

“Despite increasing competition in the market, we are confident that the company can continue to execute on the commercial front, in particular, on global expansion and accelerated sales growth in consumables,” the analyst mentioned.

Since its launch, CoolSculpting has grown its revenues from$25 million in 2010 to $255 million in 2015.

In fact, Yang pointed out that the product redefined the non-invasive fat reduction market, and with no market structure in place, ZELTIQ created one from scratch.

“Our channel checks indicate that CoolSculpting remains as the go-to machine for fat reduction treatments because of strong efficacy and safety profiles, favorable brand awareness, and flexibility of the treatments,” the analyst stated.

Growth Expected

As the market becomes more saturated, especially after 2018, Yang believes the company will continue to invest in its consumables business to drive further growth.

ZELTIQ has recently guided to 55 percent revenue growth in 2016, and the analyst expects this growth rise to 65–70 percent in 2018.

In addition, Yang expects the company to capture 75 percent of the U.S. consumables market by 2019.

ZELTIQ closed Tuesday trading at $43.88.