Carnell explained that Beauty Health is creating a whole new category in skin care. At the low end, there are "lotions and potions." Then at the high end there are medically-oriented companies that offer results, but make the process unapproachable and expensive.
Beauty Health, he said, straddles the line between the two with the HydraFacial product.
Carnell added that because the company is defining its category, the company's biggest competition is awareness. Those who have tried HydraFacial, he said, continue treatments six to eight times a year.
Beauty Health has a great business model, Carnell continued, with 50% of revenues stemming from delivery systems and the other 50% from consumable products. The company is also diversified globally.
Cramer said there are many things that aren't working in the market right now, but Beauty Health is one of the few things that is.
Let's check out the charts of SKIN.
In this daily bar chart of SKIN, below, we can see that prices made a small base pattern in the $10 area. Prices have nearly tripled since late April. SKIN is trading above the rising 50-day moving average line and above the rising 200-day average as well.
The On-Balance-Volume (OBV) shows a rise from April to early September but now is showing some softness as traders appear to be shifting towards more aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of SKIN, below, we can see a possible "dark cloud cover" pattern at the end of August and the first week in September. This top reversal pattern could result in a sideways trend as opposed to the start of a decline.
The weekly OBV line shows weakness this month and the 12-week price momentum study shows roughly equal highs in July and September, giving a bearish divergence when compared to prices which made higher highs.
In this daily Point and Figure chart of SKIN, below, we do not have a lot of price history to work with but the software is projecting an upside target of $30.
In this weekly Point and Figure chart of SKIN, below, we can see a potential target in the $38 area.
Bottom line strategy: In the short-run we are likely to see the price of SKIN trade sideways. If prices can hold above $23 we may see an upside move in the fourth quarter or as the year-end approaches. Stay nimble and be prepared for a year-end rally.