SLTM  Solta Medical Inc

Exchange

NASDAQ

Sector

Health Care

Industry

Biotechnology: Electromedical & Electrotherapeutic Apparatus

Market Cap.

235.8M

Vuru Grade

19.88/100

Current Price

$2.92
+0.00 (+0.00%)

Growth Price

$1.86
Overvalued by 36.24%

Stability Price

$2.84
Fairly valued

Company Metrics

  • P/E 162.22
  • P/S 1.56
  • P/B 1.71
  • EPS 0.02
  • Cash ROIC -0.79%
  • Cash Ratio 0.65
  • Dividend 0 / 0%
  • Avg. Vol. 1.50M
  • Shares 64.44M
  • Market Cap. 235.8M

Company Description

Solta Medical, Inc. designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications. Its products include Thermage NXT and CPT systems that provide non-invasive treatment options for skin tightening and contouring, body shaping, and enhancement in the appearance of cellulite; Fraxel re:fine and Fraxel re:store systems, which offer treatments for skin con... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Solta Medical explores sale after loss exceeds estimate
Reuters - Nov 12, 2013
(Reuters) - Solta Medical Inc SLTM.O is exploring a sale due to falling profits from its medical equipment to remove fat and improve the appearance of a person's skin and pressure from activist investor Voce Capital Management LLC.
Solta Medical Reports Third Quarter 2013 Results and Actions Implemented to ... - PR Newswire (press release)
Dr. Edward W. Knowlton Resigns as a Director of Solta Medical, Inc.
PR Newswire (press release) - May 24, 2013
HAYWARD, Calif., May 24, 2013 /PRNewswire/ -- Solta Medical, Inc. (NASDAQ: SLTM), a global leader in the medical aesthetics market, today reported Dr.
Solta Medical CEO steps down as company revamps sales strategy
San Francisco Business Times (blog) - Aug 7, 2013
Solta Medical Inc.'s top executive is leaving - with two years' salary and a consulting deal - after a disappointing second quarter and as the acquisitive cosmetic medical devices developer adjusts its sales strategy.
Solta Medical Agrees To Be Acquired By Valeant, But Another Bid Might Emerge
Seeking Alpha - Dec 23, 2013
On Monday, December 16th, Valeant (NYSE:VRX) submitted what for the time being, is the winning bid to acquire Solta Medical Devices (NASDAQ:SLTM). For some time now, we have been predicting that Solta would be acquired before the end of this year.
Valeant to acquire Solta Medical for $236 million
Reuters - Dec 16, 2013
(Reuters) - Valeant Pharmaceuticals International (VRX.TO) said on Monday it would acquire Solta Medical Inc SLTM.O for about $236 million in cash, giving it access to products used in procedures such as skin rejuvenation, skin tightening and body ...
Valeant Puts Up $250M For Struggling Solta Medical - Law360 (subscription)
Valeant Acquires Solta Medical - Zacks.com
Solta Medical to Acquire Sound Surgical Technologies
PR Newswire (press release) - Jan 29, 2013
29, 2013 /PRNewswire/ -- Solta Medical, Inc. (NASDAQ: SLTM), a global leader in the medical aesthetics market, today announced it has entered into a definitive agreement to acquire privately-held Sound Surgical Technologies LLC.
Solta Medical to buy Sound Surgical Technologies for $30.5 million - San Francisco Business Times (blog)
Solta Medical Launches Clear + Brilliant pelo™: A New and Innovative Linear ...
PR Newswire (press release) - Sep 10, 2015
10, 2015 /PRNewswire/ -- Solta Medical, a division of Valeant Pharmaceuticals North America LLC today announced the availability of the Clear + Brilliant pelo™ laser in the United States, a sophisticated approach to permanent hair reduction.
Solta Medical Reports FDA Clearance Received for Second Generation LipoSonix ...
PR Newswire (press release) - Oct 24, 2011
HAYWARD, Calif., Oct. 24, 2011 /PRNewswire/ -- Solta Medical, Inc. (Solta) (Nasdaq: SLTM), a global leader in the medical aesthetics market, today announced that Medicis Technologies Corporation (formerly LipoSonix, Inc.), a subsidiary of Medicis ...
Fraxel® Dual Laser System Receives New FDA 510(k) Clearance For Treatment Of ...
PR Newswire (press release) - Jun 20, 2013
HAYWARD, Calif., June 20, 2013 /PRNewswire/ -- Solta Medical, Inc. (Nasdaq: SLTM), the global market leader in aesthetic skin treatments, today announced it has received a new FDA 510(k) clearance of its Fraxel® DUAL 1550/1927 laser system for the ...
Magnolia Medical Appoints Robert E. Gerberich As Chief Commercial Officer
PR Newswire (press release) - Apr 25, 2017
Before UltraShape, Mr. Gerberich was Vice President of Sales and Marketing and Vice President of Sales for Thermage, Inc. (now Solta Medical, a division of Valeant Pharmaceuticals), where he led the start-up business and successful platform launch of a ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for SLTM to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate SLTM's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$2.92 Current Price

$1.86 Growth Price (DCF)

Overvalued by 36.24%


Growth Rate Assumed by Market: 49.80%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$2.84 Stability Price (EPV)

Fairly valued


Discount Rate: 15.0%

$1.83 Book Price

Overvalued by 37.47%


Very Poor Cash Return on Invested Capital over the past 5 years

SLTM has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

SLTM has lost $0.79 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20082009201020112012
Free Cash Flow -3.43M -8.68M 8.18M -773,000.00 1.53M
divided by
Invested Capital 84.68M 89.88M 89.86M 157.42M 132.63M
Cash ROIC -4.05% -9.65% 9.11% -0.49% 1.16%

Very Poor Return on Equity over the past 5 years

SLTM has shown an inability to deliver results for shareholders. This could be due to poor management, SLTM operating in a highly competitive industry, or having a weak business in general.

SLTM has generated a $12.72 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20082009201020112012
Net Income -16.39M -11.19M -2.02M -1.33M -38.01M
divided by
Stockholders' Equity 107.82M 100.24M 122.14M 126.18M 110.11M
Return on Equity -15.20% -11.17% -1.65% -1.05% -34.52%

Poor Business Performance over the past 10 years

SLTM's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

SLTM has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Free Cash Flow - -916,000.00 -6.56M 340,000.00 5.03M -3.43M -8.68M 8.18M -773,000.00 1.53M

Weak Balance Sheet

SLTM's financial position is not ideal. The key is to check whether SLTM is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Cash - 11.71M 10.12M 45.92M 52.36M 25.43M 14.74M 36.90M 17.42M 38.10M
Current Assets - 21.41M 19.74M 56.14M 65.59M 52.92M 45.99M 65.78M 55.85M 83.75M
Total Assets - 26.20M 24.03M 59.88M 68.73M 149.17M 136.15M 158.55M 209.30M 229.72M
Current Liabilities - 9.30M 8.79M 9.98M 9.75M 39.06M 31.53M 31.79M 34.47M 58.99M
Total Liabilities - 55.64M 62.77M 10.75M 10.61M 41.34M 35.91M 36.40M 83.12M 119.62M
Stockholder' Equity - -29.44M -38.73M 49.12M 58.12M 107.82M 100.24M 122.14M 126.18M 110.11M
Current Ratio - 2.30 2.25 5.62 6.72 1.35 1.46 2.07 1.62 1.42
TL-to-TA - 2.12 2.61 0.18 0.15 0.28 0.26 0.23 0.40 0.52

Low or No Reinvestment of Profits over the past 10 years

SLTM has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to SLTM operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Retained Earnings - -32.05M -40.28M -44.19M -41.51M -57.90M -69.09M -71.11M -72.44M -110.45M
Retained Earnings Growth - - -25.69% -9.70% 6.06% -39.49% -19.33% -2.92% -1.87% -52.47%

Loss Making Entity over the past 10 years

SLTM has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$10.73 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Net Income -6.58M 5.03M -7.54M -3.91M 2.78M -16.39M -11.19M -2.02M -1.33M -38.01M
divided by
Revenue 24.91M 50.38M 40.66M 54.32M 63.10M 56.68M 98.82M 110.93M 115.98M 144.55M
Net Profit Margin -26.43% 9.99% -18.54% -7.20% 4.41% -28.92% -11.33% -1.82% -1.15% -26.29%

Strong Pricing Power over the past 10 years

SLTM has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$68.40 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Gross Profit 12.34M 37.93M 28.35M 39.06M 47.13M 41.62M 58.25M 69.53M 99.86M 89.18M
divided by
Revenue 24.91M 50.38M 40.66M 54.32M 63.10M 56.68M 98.82M 110.93M 115.98M 144.55M
Gross Margin 49.55% 75.29% 69.72% 71.91% 74.68% 73.42% 58.95% 62.68% 86.10% 61.69%

Medium Capital Intensity over the past 10 years

SLTM has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

47.59% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Capital Expenditure - 3.16M 2.25M 899,000.00 903,000.00 1.58M 1.83M 2.02M 1.49M 2.96M
divided by
Net Income -6.58M 5.03M -7.54M -3.91M 2.78M -16.39M -11.19M -2.02M -1.33M -38.01M
Capital Expenditure Ratio - 62.71% -29.82% -23.00% 32.48% -9.65% -16.37% -99.90% -111.81% -7.79%

No Dividend History over the past 10 years

SLTM has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 2.31M 5.32M 3.66M 6.56M 24.88M 24.51M 47.85M 58.91M 60.57M 64.44M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End - - - 6.99 5.93 1.28 2.04 3.04 3.14 2.60
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

SLTM has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2003200420052006200720082009201020112012
Shares Outstanding 2.31M 5.32M 3.66M 6.56M 24.88M 24.51M 47.85M 58.91M 60.57M 64.44M
Stock Bought Back - -56.63% 45.15% -44.15% -73.63% 1.54% -48.78% -18.78% -2.75% -6.00%
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