CUTR

[admin]

Here is what Cutura (CUTR) a leading provider of laser and energy-based aesthetic systems for practitioners worldwide, announced last week (Oct 11, 2016):

• Approximately $30 million of revenue, representing 30% growth year-over-year
• Revenue achievement represents record third quarter, and among the highest quarters, in Company history
• Nine consecutive quarters of double-digit revenue growth
• GAAP net income in the range of $1.3 million to $1.5 million

Well, that's good news, but isn't it priced in already?

Since mid September, the stock is up almost 40%, some people clearly expected good things, or even knew they would arrive. Another heavily overbought stock that seems to offer a good temporary short.

[admin]

But how is business trending? Here is the revenue of the last five years:

CUTR Revenue (Quarterly) data by YCharts

The net income trend is also improving from a couple of difficult years

CUTR Net Income (Quarterly) data by YCharts

But the first two quarters of this year were still in the red (EPS of -$0.16 and -$0.09 respectively) and analysts still expect a loss for this year (EPS of -$0.02), although not next year (EPS of $0.39). The good news mentioned in the first entry in this tread indicates that there is upside to these expectations (this quarter at least, as analysts expected a loss of $0.03).

The balance sheet is clean though, with cash and short-term investments totalling $43M at the end of Q2 and almost no debt. Even so, trading at what's likely to be more than 30x next years earnings, combined with the heavily overbought situation makes this a potential short, at least temporarily.

But be careful, there is always some fundamental improvement going on that only insiders know (take-over interest, new product, stuff like that).