Analyst Says Cutera's Recurring Revenue Model Tempered By Economic Overhang

William Blair has initiated coverage on Cutera Inc CUTR with a Market Perform rating.
The analyst writes that in a $13.9 billion aesthetics industry expected to grow at an 11% five-year compound annual rate, Cutera should take share with its redefined strategy centered on innovation and growing recurring revenue.
Cutera's new AviClear device should drive over 50% of company growth in the next two years and represent a potential platform product for the company.
Related: Macro Factors Take a Toll on Cutera Earnings, Analyst Slashes Price Target by 61%.
The device is in the early innings of launch in an acne industry where isotretinoin has maintained a substantial market share.
While questions remain (the product was approved less than one year ago), William Blair's survey of dermatologists points to a large opportunity in the $3 billion domestic acne market.
Respondents use lasers to treat 6% of acne patients but believe that 27% of patients would be candidates for a clinically proven device.
Price Action: CUTR shares are up 2.96% at $34.79 on the last check Tuesday.