In the world of medical lasers, the companies that manufacture those used for aesthetic or cosmetic purposes have been the so-called "glamour stocks." Zapping wrinkles, age spots, and varicose veins has been brisk business; even dental lasers have captured the spotlight. Yet lasers that are used for true medical purposes -- say, to treat an enlarged male prostate -- have hidden in the shadows.

Laserscope (NASDAQ:LSCP) manufactures more of the latter kind of laser, and it has hidden behind market darlings like Palomar Medical Technologies (NASDAQ:PMTI), Cutera (NASDAQ:CUTR), and even Candela (NASDAQ:CLZR), which primarily focus their laser beams on the cosmetic and aesthetic market.

The company has even gotten short shrift here at the Fool. For example, last year Foolish contributor James Early discussed why he initially looked at Laserscope as a possible investment, but ultimately passed. Tom Gardner had considered the company as a possible recommendation for Motley Fool Stock Advisor, but he also passed on it in favor of American Healthways.

While the recent stock performance may suggest that both made the right decision at the time, investors who have looked at revenues and earnings for the past few years might wonder if Tom and James haven't overlooked a potential winner here in the medical device industry. For the past two years, it seems as though sales have been continuously increasing, with profits following suit.

Sales

2005

2004

2003

Q1

$28.2

$18.8

$12.5

Q2

$33.5

$21.5

$12.9

Q3

$30.4

$24.2

14.3

Q4

$35

$29.4

$17.8

Total

$127.1

$93.8

$57.5



Profits

2005

2004

2003

Q1

$0.22

$0.10

$0.01

Q2

$0.23

$0.13

$0.02

Q3

$0.28

$0.19

$0.03

Q4

$0.25

$0.23

$0.08

Total

$0.98

$0.65

$0.14



Sequential revenues have continued their steady, year-over-year climb, while earnings have been making a similar rise. True enough, but if we hone in on the growth that those numbers represent, we see an actual decline in the rates.

Revenues

2005

2004

Q1

56.5%

65.9%

Q2

25.6%

69.2%

Q3

25.6%

69.2%

Q4

19%

65.2%

Total

35.5%

63.1%



Earnings

2005

2004

Q1

120%

900%

Q2

77%

550%

Q3

47%

533%

Q4

9%

188%

Total

51%

364%



As I've noted in the past, declines in the rates of growth greater than 50% are a warning sign. Using this signal, investors could have avoided much of the crash in the stock price that began in July of last year.

Still, what's past is past, and Laserscope has announced a new $7 million sales order by its Chinese distribution partner for its premier GreenLight laser system (used to treat enlarged prostrates). As the company's largest one-time customer ever, China currently represents a largely untapped market for both medical device lasers and cosmetic and aesthetic lasers. A large, aging population with a growing level of wealth bodes well for a number of industries, not the least of which could be lasers.

One deal does not a quarter make, but it could be signal that the tide is turning for this leading medical device laser manufacturer.

Fool contributor Rich Duprey owns shares of Candela but does not own any of the other stocks mentioned in this article. The Motley Fool has a disclosure policy.