Soliton Inc [NASDAQ: SOLY]: It has been a good run for Soliton Inc (SOLY] in 2019. It closed yesterday’s trading at $13.31 up 5.94%. This brings it closer to its 52-weeks high of $14. While $14 could offer some level of resistance in the short-term, there are several underlying factors that could push this stock way past this level.
For starters, Soliton Inc. is a devices medical company, a market where patents are crucial to revenue growth. It is on this basis that Soliton revenues are likely to grow stronger in coming quarters. On the 4th of April, it emerged that the company had received a European patent for the Rapid Acoustic Pulse device.
This is a tattoo removal device, and will open up opportunities for Soliton Inc in an industry that is anticipated to be worth $4.8 billion a year, by the year 2023. With this device now having validation in 38 European countries, Soliton has a good chance of dominating the tattoo removal market going forward. This could support the price significantly in the coming quarters.
On top of that, on the 9th of April, Yahoo Finance ran a story that Soliton Inc (SOLY) had completed evaluation for its POC clinical treatment of cellulite. The study was done by two skin experts, Dr. Michael Kaminer at Skincare physicians, and Dr. Elizabeth Tanzi of Laser and Skin care. The aim is to evaluate results at two interval: First at 12 –weeks and at 26-weeks. Once this is successfully completed and goes to market, it will have a huge impact on Soliton’s revenues. That’s because, cellulite treatment is a multi-billion industry, and if Soliton dominates it with efficient technologies, its revenues will grow significantly over coming quarters.
In essence, the fundamentals support soliton’s potential to break past resistance at $14. Looking at market-wide driven growth factors, Soliton Inc. (SOLY) is in a good standing as well. For instance, the company has a healthy level of liquidity in spite of investing heavily in research and development. The company has a levered free cash flow of $904.21k. This gives it the leeway to keep innovating and growing its revenues over time. Besides, the company’s total debt stands at $10.57 million and with the patents it has won so far, its revenues are likely to grow and further push up its current ratio which now stand at 0.01.
The company is also supported by the continued positive trajectory of the NASDAQ futures. The NASDAQ and the U.S markets in general continue to record new highs every day. The NASDAQ closed the day at 7645.75 points up 0.37%. The S&P 500 and the Dow futures are also on a growth path too, both closing yesterday’s trading up 0.38% and 0.59% respectively. This indicates strength in the U.S markets and will likely continue to draw in money, from investors seeking the stability that comes with the U.S economy. As the whole market trends upwards, so will individual stocks such as Soliton Inc. which are backed by some strong fundamentals of their own.