Here's Why Sientra Stock Is Plummeting Today

What happened

Shares of Sientra (NASDAQ: SIEN) were down 25% at 12:41 p.m. EDT today after the aesthetics company reported fourth-quarter earnings after the bell on Tuesday that left investors worried about its profitability.

So what

The revenue line looks great at Sienta: Sales jumped 72% in the fourth quarter, mostly thanks to a 196% increase in sales of miraDry, the company's permanent nonsurgical solution to underarm sweat.

As sales of the miraDry system continue to grow, they should drive sales of high-margin consumables used during the procedures in future quarters. Since younger people are more likely to have underarm sweat problems, Sienta is positioning miraDry as a solution for aesthetics doctors to bring in younger patients who will hopefully return when they're older and need treatments for aging.

Sales of Sientra's breast products -- implants and the like -- grew 28% in the fourth quarter, which was higher than the 18% increase the segment experienced for the year. Management guided for at least 25% year-over-year growth in breast implant sales this year.

Investors' concern likely comes from the bottom line, where Sientra lost $24.6 million in the fourth quarter, versus $17.8 million in the year-ago quarter. Essentially, all of the increased loss can be attributed to the $13 million increase in operating expenses as the company focuses on building out the sales and marketing for miraDry.

Now what

Whether today's drop makes Sientra a value play or a value trap largely depends on whether the investments in miraDry pay off in higher sales. With $86.9 million in the bank, Sienta doesn't have a whole lot of maneuvering room.

In the breast products category, a Food and Drug Administration panel to review the safety of implants that's scheduled for later this month offers some uncertainty as well, which may be keeping investors on the sideline. The news from the meeting will likely drive women toward or away from the procedure, which will affect all breast implant makers, including Sientra.

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