Cardiac Science Corporation: Feeling much better, thanks.

Cardiac Science Corporation (Nasdaq:CSCX) was in poor health 18 months ago. Sales of the Bothell, Wash.-based company’s heart monitoring equipment were slowing, competition was tough and the stress undeniably affected its ticker: in one year, its stock dropped about 38%, to $7.25 in September 2006, an all-time low.

The patient is doing much better today, though, thanks to a turnaround in its heart monitoring equipment business and strong growth in sales of automated external defibrillators (AEDs), portable devices for shocking a heart back into rhythm after a heart attack. AEDs are cheaper (about $1,000) versions of the defibrillators seen in every medical show ever aired, which cost about $10,000 apiece. AEDs are popular devices these days, sold to airports, corporations and government agencies to jump start ailing hearts even before the ambulance arrives.

In the fourth quarter of 2007, sales rose 29% from a year earlier, to $50.4 million, pushed up by 45% growth in AED sales and 16% growth in monitoring equipment. That broke a losing streak in which monitoring revenue had declined year-to-year for six quarters straight. Net income was $2.37 million, compared to a $35,000 loss a year earlier.

Its stock price, however, has not fully reflected its recovery. It topped out at $11.50 in July, 2007, and closed at $8.16 on Tuesday. Its 52-week low was $7.35, reached last December.

For that reason, analysts see it as a good buying opportunity. “CSCX has recently experienced a sell-off which we believe is overdone,” wrote Sun Trust Robinson Humphrey analyst Jonathan Block on Jan. 8. The stock is now trading at just 0.9 times his estimated 2008 revenues of $202 million (its market cap is $186 million.) Block projects earnings of $0.37 per share in 2008, up from $0.24 per share last year. His target price is $14, a 1.5 times multiple of 2008 revenues, still below the 2 times forward revenues its peer group averages.

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