Progyny’s Strong Results Overshadowed by ART Cycle Decline and Core Business Uncertainty

Analyst Richard Close from Canaccord Genuity maintained a Hold rating on Progyny (PGNY – Research Report) and decreased the price target to $21.00 from $23.00.

Richard Close has given his Hold rating due to a combination of factors related to Progyny’s recent performance and future outlook. The company reported strong quarterly results, surpassing both internal and consensus expectations, with additional revenue contributions from extended services to Amazon members. However, despite these positive outcomes, there are underlying concerns that temper enthusiasm.
One of the key concerns is the decline in ART cycles per female utilizer, which fell compared to the previous quarter. Additionally, while the full-year revenue guidance was raised, a significant portion of this increase is attributed to Amazon’s contribution, which introduces some uncertainty about the core business’s growth. The sales pipeline, although comparable to the previous year, shows a decrease in the average number of lives at prospective clients, possibly due to economic factors. These elements, combined with ongoing investments that may impact margins, contribute to the Hold rating as they indicate potential volatility and challenges ahead.

In another report released on May 9, Leerink Partners also maintained a Hold rating on the stock with a $28.00 price target.