Zeltiq (ZLTQ) has one of most unique products on the medical technology scene.
The concept is simple. ZLTQ has designed a ‘CoolSculpting’ machine that freezes fat cells through an FDA-approved proprietary process called crypolipolysis. Once the fat cells are frozen, they break up and your body disposes of them.
Apparently, you can reduce the fat cells in a given location by around 30%.
This is different than weight loss, because when you lose weight, you are simply shrinking the fat cells. If you begin to gain weight again, the fat cells swell up once more.
CoolSculpting a Unique Product for ZLTQ
CoolSculpting isn’t meant for significant fat reduction — it’s not a replacement therapy for liposuction, which literally vacuums fat deposits from your body surgically. It is meant for people who are looking to trim love handles, muffin tops and other specific areas where fat is stubbornly hanging on.
The most attractive aspect of CoolSculpting is the fact that it’s noninvasive and has no significant recovery time. You go in for a one-hour treatment and then walk back out the door. The fat loss takes place over the next two to three months, as your body breaks down the frozen cells and eliminates them.
ZLTQ has been public for about three years now, and it’s getting a lot of press … as well as a great number of customers. Estimates are that this is likely a $4 billion market and the company expects annual growth in the sector to be 20% or more for the next five years.
And because this is noninvasive, ZLTQ sells its CoolSculpting machine and equipment to cosmetic surgeons and dermatologists as well as aesthetic specialists. It’s not something that has to be done in a doctor’s office, which adds to Zeltiq’s potential market significantly.
ZLTQ offers a two-day training at its headquarters for new CoolSculpting techs called CoolSculpting University. The number of attendees has grown significantly since the program started.
The company has sold more than 3,900 machines to customers around the world. And ZLTQ is now looking to expand its base as well as encourage current customers with one machine to get a second one.
The price of a single procedure varies by what area on the body is being targeted and can start around $400, but if you are interested in doing a number of areas, there is usually a discount per area. And this is the big growth opportunity for Zeltiq — bundling services will become the name of the game.
Also, ZLTQ is already seeing that larger packages (eight to 10 treatments) are easier to sell when practices have more machines, and larger packages also have better results for patients.
Just this week, ZLTQ announced that the FDA has approved its new applicator — CoolMini — that can go after that annoying chin fat. Its growing array of aesthetic procedures are going to be in great demand from the graying baby boomers to Gen Xers who are now getting into their 30s.
In the past year, ZLTQ is up 40%, and that’s including three tough quarters in 2015 for most of the market.
Once the economy begins to grow consistently both here and abroad, ZLTQ has significant growth potential for years to come.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
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