Boston, MA 09/29/2014 (wallstreetpr) – Griffin Securities’ analyst Zack Ajzenman argues that Syneron Medical Ltd. (NASDAQ:ELOS) remains a strong buy despite underperforming for the better part of the year. The analyst maintains that the company’s fat-busting ultrasound machine has the potential to command impressive sales going forward. The invention according to Bloomberg will only be a success in the U.S. if it can do what the company claims it can, painlessly.
Competition from Zeltiq Aesthetics Inc. (NASDAQ:ZLTQ)
Syneron Medical Ltd. (NASDAQ:ELOS) is already offering free trials of the machine to stock analysts as it seeks to achieve the much-needed audience for impressive sales. The company is aggressively pushing for sales in the U.S by soliciting investors after gaining approval. Syneron Medical is trying to compete against Zeltiq Aesthetics Inc. that is up by 21% at the back of its technology that has been used with success to freeze fat cells.
Executives in the company have already reiterated plans to accelerate a push for sales in the U.S where they remain hopefully of achieving impressive sales. There is a belief in the company that sales for UltraShape could reach highs of $20 million in the coming months. Syneron Medical Ltd. (NASDAQ:ELOS) is reportedly pursuing 20%-30% of the total non-invasive market-share, which is reported to have recorded $150 million in sales last year alone.
Spending on Marketing to Affect Margins
The push for markets in the U.S comes at a time that the company has been struggling and losing market share due to increased competition. Stock underperformance in the market has been attributed to failure by the company to show how it intends to achieve sales in the U.S.
Increased spending on marketing for popularizing UltraShape is expected to considerably affect profit margins. Ajzenman has reiterated that even though sales may improve this year, operating margins will not improve until 2015.
The fact that UltraShape is reported to be pain-free is expected to give Syneron Medical Ltd. (NASDAQ:ELOS) the much needed capacity to compete against rivals. Syneron Medical also has other products especially for the removal of tattoos, which it expects to give it an advantage in the industry. The company also has a skin whitening product.
