Zltq

Source: Zetliq Aesthetics. 

Freezing away stubborn fat cells continues to pay off for Zeltiq Aesthetics (NASDAQ:ZLTQ). The company behind the CoolSculpting platform that's gaining traction in reshaping love handles, abdomens, and thighs posted another blowout quarter after Tuesday's market close.

Revenue soared 55% to $45.7 million, as its installed base has grown by 48% to 2,822 CoolSculpting machines over the past year. The non-invasive fat cell-freezing machines performed 159,116 revenue cycle procedures during the quarter, up 54% from a year earlier.

Analysts were holding out for only a 37% uptick in revenue.

The positive surprises don't end at the top of Zeltiq's income statement. Zeltiq came through with a profit of $0.12 a share. Wall Street pros were expecting it to repeat the $0.08 deficit it posted a year earlier. 

It's hard to fathom what analysts were looking at here with their conservative projections. Zeltiq posted its first profitable quarter just three months ago, and Wall Street was holding out for red ink that time, too. That's understandable. The market often misses when a growth stock turns the profitability corner. One can also argue that analysts tried to play it safe this time around because the third quarter is a seasonally sleepy quarter for the slimming procedures. It's not the springtime peak that we find during the second quarter, when folks try to tone up their bathing-suit bodies ahead of summer splashes. However, given the momentum Zeltiq has been consistently flashing since early 2013, it's hard to take a conservative stance with the company and not get smoked.

Surprising the market with a profit was one of the three things to watch that we mentioned in Monday's earnings preview. Another thing to watch was for Zeltiq to juice up its guidance the way it has nearly every quarter since the beginning of last year. Yes, we got that, too.

Zeltiq is now targeting $171 million to $173 million in revenue for all of 2014, up from the $160 million to $165 million it was forecasting just three months ago. Zeltiq's outlook started at a modest range of $134 million to $137 million back in February, and it has gone up sharply in each of this year's first three quarters. This should all seem pretty familiar to longtime shareholders, as Zeltiq's guidance was bumped higher three times last year. Zeltiq is also boosting its gross profit and adjusted EBITDA margin forecasts.

CoolSculpting isn't the only machine on the market tackling fat cells with growing success. We also can't ignore liposuction and other cosmetic surgical procedures, which, while being invasive and more expensive than CoolSculpting, do offer more dramatic and immediate results. However, with positive momentum continuing for CoolSculpting -- and blasting through Wall Street targets in recent quarters -- it's easy to see why the stock has popped more than sixfold since bottoming out early last year. 

 

Rick Munarriz owns shares of Zeltiq Aesthetics. The Motley Fool recommends Zeltiq Aesthetics. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.