On Wednesday, Stifel increased its price target for The Beauty Health Company (NASDAQ:SKIN) to $4.00, up from the previous $3.00 on the shares, while maintaining a Hold rating.
The adjustment follows The Beauty Health Company's fourth-quarter earnings, which showed a revenue of $96.8 million, aligning with Stifel's projection of $95.2 million and surpassing the general market expectation of $88.0 million.
The Beauty Health Company's fourth-quarter performance demonstrated a stronger footing for consumables compared to capital equipment, as anticipated in Stifel's monthly trackers. The company's adjusted EBITDA reached $3.4 million, exceeding both Stifel's and the market's expectations of $1.0 million and negative $2.6 million, respectively. This outcome reflects the stabilization efforts of the new management team.
Looking ahead, The Beauty Health Company's guidance for 2024 indicates a top-line revenue consistent with Stifel's estimate of $402 million. Additionally, while Stifel's non-GAAP gross margin (GM) estimate was close at 66%, the actual figure reported was slightly lower at 64.1%. However, the most significant difference lies in the operational expenses, as the company's EBITDA guidance for 2024 is over $40 million, surpassing both Stifel's estimate of $23 million and the broader market's expectation of $36 million.
Despite the positive EBITDA guidance for the upcoming year, Stifel remains cautious, noting that the forecast is heavily weighted towards the latter half of the year—a pattern that has previously caused challenges for The Beauty Health Company. In light of this, Stifel reaffirms its Hold rating on the stock, adopting a "wait and see" stance.
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