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Beauty Health Company (SKIN)
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Beauty Health (SKIN) AI Stock Analysis

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SKIN

Beauty Health

(NASDAQ:SKIN)

Rating:55Neutral
Price Target:
$2.00
▼(-2.44% Downside)
Beauty Health's overall stock score reflects significant financial challenges, including high leverage and negative profit margins, which are partially offset by improved cash flow and strategic debt restructuring. The positive outlook from the earnings call and recent corporate events provide some optimism, but valuation concerns and mixed technical indicators suggest caution.
Positive Factors
Cash and Stability
The company ended the quarter with a solid $212 million in cash, which provides financial stability.
Financial Performance
The company's consumables now represent 71% of net sales and carry stronger margins compared to delivery systems, supporting an EBITDA margin outperformance.
Strategic Adjustments
The impact of China's shift from a direct to a distributor model is largely behind them, positioning the APAC region for better trends and stabilization in the future.
Negative Factors
Economic Uncertainty
Ongoing tariff dynamics and uncertainty around the economy may require several more quarters of performance.
Interest Rates and Market Conditions
New machine placements remain pressured due to the higher interest rate environment and uncertain macro conditions.
Macroeconomic Environment
There are continued declines in device sales driven by a worsening macroeconomic environment and higher rates of provider churn.

Beauty Health (SKIN) vs. SPDR S&P 500 ETF (SPY)

Beauty Health Business Overview & Revenue Model

Company DescriptionThe Beauty Health Company designs, develops, manufactures, markets, and sells aesthetic technologies and products worldwide. The company's flagship product includes HydraFacial that enhance the skin to cleanse, peel, exfoliate, extract, infuse, and hydrate the skin with proprietary solutions and serums. Its products also comprise Syndeo, a HydraFacial Delivery System designed to elevate every part of the treatment and connects providers to the consumer's preferences to create a more personalized experience; HydraFacial Nation App, an app that allows consumers to learn about their skin health, discover treatment options, and track their treatments over time; and Keravive, a treatment for scalp health. The company was founded in 1997 and is headquartered in Long Beach, California.
How the Company Makes MoneyBeauty Health makes money through the sale of its skincare products and services, which include a variety of treatments and therapies aimed at improving skin health. The company generates revenue by selling its products directly to consumers through retail and online channels, as well as through partnerships with spas, clinics, and beauty professionals who offer its treatments. Additionally, Beauty Health may engage in licensing agreements or collaborations with other brands to expand its market presence and drive sales.

Beauty Health Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong performance in consumables and margin improvements, alongside strategic debt restructuring. However, challenges in global device sales, particularly in APAC, and macroeconomic pressures remain concerns.
Q2-2025 Updates
Positive Updates
Exceeded Revenue and Adjusted EBITDA Guidance
For the third consecutive quarter, the company exceeded both revenue and adjusted EBITDA guidance, achieving $78.2 million in revenue and $13.9 million in adjusted EBITDA.
Significant Margin Improvement
The company saw a significant improvement in gross margins, with GAAP gross margin at 62.8% and adjusted gross margin at 65.9%.
Strong Consumables Business
The consumables business, now over 70% of revenue, demonstrated strong performance with booster sales in the Americas rising over 8% year-on-year.
Debt Restructuring and Cash Position
The company restructured its debt and closed the quarter with $212 million in cash, enhancing financial flexibility.
Increased Full-Year Guidance
The company increased the low end of its net sales full-year guidance range to $285 million to $300 million and adjusted EBITDA guidance range to $27 million to $35 million.
Innovation and Product Launches
Successful launch of HydraFillic with Pep9 booster and plans for further innovation including a new retail skincare line and additional boosters.
Negative Updates
Decline in Global Device Revenue
Global device revenue declined by 36.5% year-over-year due to macroeconomic pressures impacting capital equipment purchasing decisions.
Revenue Decline in APAC
Revenue across APAC declined 43.4%, driven by the transition in China from a direct business to a distributor model.
Pressure on Equipment Sales
Device sales remained pressured due to macroeconomic headwinds and higher churn.
Seasonal and Tariff Challenges
Guidance for Q3 reflects a seasonally slower quarter with expected tariff impact of approximately $4 million.
Company Guidance
In The Beauty Health Company's second-quarter 2025 earnings call, the company exceeded both revenue and adjusted EBITDA guidance for the third consecutive quarter, reporting $78.2 million in revenue and $13.9 million in adjusted EBITDA. The gross margin showed significant improvement, with GAAP at 62.8% and adjusted at 65.9%. Operating expenses were reduced by nearly 18%, and the company ended the quarter with $212 million in cash following a strategic debt restructuring. While device sales faced pressure due to macroeconomic headwinds, consumables, which now account for over 70% of revenue, remained strong, driven by a favorable mix and cost control. The company increased the low end of its full-year net sales guidance to $285 million to $300 million and adjusted EBITDA to $27 million to $35 million, citing strategic R&D investments and expected tariff impacts for the cautious outlook. The call highlighted successful product launches, such as HydraFillic with Pep9, and ongoing global expansion, with over 35,000 active devices worldwide.

Beauty Health Financial Statement Overview

Summary
Beauty Health faces significant financial challenges with declining revenues and profitability issues. While cash flow has improved, high leverage and negative profit margins highlight risks. The company needs to address operational inefficiencies and manage debt levels to ensure long-term financial stability.
Income Statement
45
Neutral
The company exhibits declining revenue, with a growth rate of -3.53% from 2024 to TTM. Profit margins are negative due to significant net losses, demonstrated by a TTM net profit margin of -11.94%. The gross profit margin stands at 56.60%, indicating a decent cost management relative to revenue. However, negative EBIT and EBITDA margins suggest operational inefficiencies.
Balance Sheet
40
Negative
The balance sheet reveals high leverage, with a debt-to-equity ratio of 12.32, posing a substantial risk. The equity ratio is low at 6.83%, indicating limited equity cushion. Return on equity is negative due to net losses. The company's reliance on debt over equity increases financial risk.
Cash Flow
55
Neutral
Cash flow analysis shows improvement, with a 219.42% growth in free cash flow from 2024 to TTM. The operating cash flow to net income ratio indicates better cash generation than reported net income. However, the free cash flow to net income ratio is still below optimal levels, suggesting cash flow challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue322.47M334.29M397.99M365.88M260.09M119.09M
Gross Profit182.51M182.30M155.11M248.78M178.54M67.20M
EBITDA-7.82M10.34M-53.56M80.75M-22.00M-2.81M
Net Income-38.52M-29.10M-100.12M44.22M-375.11M-29.18M
Balance Sheet
Total Assets673.82M685.68M929.11M1.01B1.22B222.84M
Cash, Cash Equivalents and Short-Term Investments373.03M370.06M523.02M568.20M901.89M9.49M
Total Debt567.69M568.16M752.29M751.79M746.41M216.54M
Total Liabilities627.76M633.88M869.72M837.43M916.51M252.79M
Stockholders Equity46.06M51.80M59.39M171.48M302.30M-29.96M
Cash Flow
Free Cash Flow29.85M9.34M8.70M-123.99M-43.98M-16.25M
Operating Cash Flow35.98M16.13M21.75M-106.60M-28.36M-12.44M
Investing Cash Flow-6.14M-6.79M-31.51M-18.87M-37.73M-3.82M
Financing Cash Flow-99.97M-158.34M-37.45M-205.24M959.03M18.27M

Beauty Health Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.05
Price Trends
50DMA
1.94
Positive
100DMA
1.68
Positive
200DMA
1.58
Positive
Market Momentum
MACD
0.04
Positive
RSI
52.81
Neutral
STOCH
27.12
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKIN, the sentiment is Positive. The current price of 2.05 is below the 20-day moving average (MA) of 2.11, above the 50-day MA of 1.94, and above the 200-day MA of 1.58, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 52.81 is Neutral, neither overbought nor oversold. The STOCH value of 27.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKIN.

Beauty Health Risk Analysis

Beauty Health disclosed 95 risk factors in its most recent earnings report. Beauty Health reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Beauty Health Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$608.82M6.1413.68%2.09%-11.79%
65
Neutral
$234.69M21.0210.98%-5.04%-22.01%
63
Neutral
$20.50B14.76-2.72%3.09%1.90%-4.74%
58
Neutral
$1.10B17.424.12%2.56%-2.92%-43.06%
55
Neutral
$254.92M-26.54%-15.33%75.52%
52
Neutral
$589.26M5.74-23.99%-4.39%-326.42%
46
Neutral
$3.82B40.12-9.98%-3.68%-631.67%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SKIN
Beauty Health
2.05
0.64
45.39%
HELE
Helen Of Troy
25.57
-29.25
-53.36%
NUS
Nu Skin
11.49
3.71
47.69%
COTY
Coty
4.37
-4.62
-51.39%
EPC
Edgewell Personal Care
23.40
-13.93
-37.32%
EWCZ
European Wax Center
4.16
-2.73
-39.62%

Beauty Health Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Beauty Health Modifies Indenture for Convertible Notes
Positive
Sep 4, 2025

On September 4, 2025, The Beauty Health Company, along with its domestic and foreign subsidiaries, entered into a Supplemental Indenture with U.S. Bank Trust Company to modify an existing indenture related to its 7.95% Convertible Senior Notes due 2028. This modification includes securing the notes with a first-priority guarantee by new foreign subsidiaries and addressing certain ambiguities in the original indenture, potentially strengthening the company’s financial structure and enhancing investor confidence.

Executive/Board ChangesBusiness Operations and StrategyRegulatory Filings and Compliance
Beauty Health Amends Governance Documents and Leadership
Neutral
Aug 1, 2025

On July 31, 2025, The Beauty Health Company filed a Certificate of Correction to amend an error in its corporate governance documents, allowing directors to be removed with or without cause by a majority vote. Additionally, the Board appointed Stephen Fanning as Chairman of the Nominating and Corporate Governance Committee, reflecting a strategic move in its leadership structure.

Executive/Board ChangesShareholder Meetings
Beauty Health Holds Virtual Annual Stockholders Meeting
Neutral
Jun 17, 2025

On June 12, 2025, The Beauty Health Company held its annual stockholders meeting virtually, where 78.40% of the shares were represented, establishing a quorum. During the meeting, seven directors were elected for a one-year term, Deloitte & Touche LLP was ratified as the independent auditor, and the compensation for named executive officers was approved on a non-binding basis.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 05, 2025