Progyny stock target cut, retains buy rating on Q1 earnings report

EditorNatashya Angelica
Published 05/10/2024, 06:43 PM
PGNY
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On Friday, Progyny Inc . (NASDAQ:PGNY) experienced a revision in its stock outlook as an analyst at BTIG adjusted the price target to $41.00, a decrease from the previous $50.00 target, while maintaining a Buy rating on the shares. This move came after the company's first-quarter earnings report, which was released after the market closed on Thursday.

Progyny's reported quarterly revenue of $278.1 million, which represented an 8% year-over-year increase, fell short of both BTIG's and the consensus estimates of $289.2 million and $289 million, respectively. This revenue shortfall came as an unwelcome surprise to the analyst.

Despite the lower-than-anticipated revenue, Progyny posted an adjusted EBITDA of $50.3 million, surpassing both BTIG's and the consensus projections of $49.7 million and $50 million. This outperformance in earnings was attributed to reduced expenses in sales, marketing, and general and administrative costs.

During the earnings call, management noted a slight decline in service utilization, from 0.48% in the first quarter of 2023 to 0.46% in the same period this year. Additionally, the company observed a normalization in the mix of services provided. The earnings call also addressed numerous inquiries regarding the potential psychological impact of the recent Alabama Supreme Court case on different states.

Following the lower-than-expected revenue, Progyny has revised its financial guidance for the year, with both revenue and EBITDA forecasts being adjusted downwards. Still, the company anticipates a significant revenue increase in the second half of 2024.

Despite the adjustments in financial projections and the initial revenue miss, the analyst expressed confidence in Progyny's adjusted EBITDA margin of 18%, considering the stock to be attractively priced based on earnings.

InvestingPro Insights

Progyny Inc. (NASDAQ:PGNY) has shown resilience in its financial performance, as highlighted by the recent earnings report. The InvestingPro data underscores some key strengths and trends for the company.

With a market capitalization of $3.12 billion and a robust revenue growth of 26.94% over the last twelve months as of Q1 2024, Progyny demonstrates a solid trajectory in expanding its business. While the company's P/E ratio stands at a high 49.74, this is somewhat mitigated by a PEG ratio of 0.47, suggesting that the earnings growth may justify the earnings multiple to some extent.

InvestingPro Tips for Progyny reveal that the company holds more cash than debt on its balance sheet and is expected to see net income growth this year. These factors, coupled with the company's liquid assets exceeding short-term obligations, provide a cushion for operational flexibility and potential investments.

Analysts are optimistic about Progyny's profitability, predicting it will be profitable this year and noting that it has already been profitable over the last twelve months. For investors seeking more insights, there are additional 11 InvestingPro Tips available for Progyny at https://www.investing.com/pro/PGNY.

For readers interested in a deeper dive into Progyny's financials and strategic positioning, InvestingPro offers a comprehensive analysis. Make sure to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to valuable market insights and investment tips tailored to savvy investors.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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