Friday, September 28, 2007

New Report Series

Crystal Equity Research is introducing a new series of research reports called CER Reports with coverage of PhotoMedex, Inc. (PHDM: Nasdaq). In addition to the initial and update reports we will provide weekly commentary all the names in the group - all available without the user names and passwords needed for our subscription research products. Visit the Crystal Equity Research web site to view the report.

Look for more small-cap ideas in the CER Report format. We use the same selection criteria and analytical methodologies as in our subscription report series, but reserve CER Reports for promising companies that have not yet achieved the market cap, share price or trading volume levels that attract widespread research coverage. We designed the report for research coverage sponsored by public companies or their agents. Please review the important disclosures at the end of each report.

PhotoMedex is a perfect candidate for the CER Report series. A few of the Company's attractive characteristics include: building revenue, barrier-producing proprietary technology, highly strategic approaches to marketing and distribution in its target markets, as well as a diverse and synergistic product and service line.


The Company is a developer of laser systems and solutions for dermatological and surgical applications. Its flagship product is the patented XTRAC laser for the treatment of psoriasis and vitiligo. Clinicians have responded favorably to PhotoMedex’s unique per-treatment fee model, which eliminates upfront capital expenditures. PhotoMedex also serves professional dermatologists with a line of topical preparations for wound treatment and skin care marketed under the ProCyte brand name.

We have initiated coverage of PHMD with a Buy rating and a $2.50 price target for investors with a tolerance for risk. Our target represents a 3.7 multiple times our 2008 sales estimate of $43.0 million. We believe this is a fair valuation based on an analysis of metrics among PhotoMedex peers in the dermatology and photo-medicine markets.

PhotoMedex shares appear to be flying under the radar. One reason - the Company has yet to product profits. Management has also had to return to the capital markets for financing that has created some dilution. We think investors are overlooking the value in the technology and have not yet noticed that recent results show substantial improvement in margins and reduction in cash usage by operations.


Neither the author of the Small Cap Copy web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Crystal Equity Research has an Accumulate rating on PHMD shares. An agent of the company has sponsored the research for a twelve-month period through payment of an upfront cash fee.

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