KeyBanc Capital Markets has maintained a Sector Weight rating on shares of Progyny (NASDAQ: NASDAQ:PGNY), following the company's first investor day since its public offering in 2019.
The firm expressed concerns over the ambitious midterm financial targets set by Progyny, suggesting they may be challenging to meet. The fertility benefits management company's goals include approximately 20% annual revenue growth and the addition of around 1.25 million lives each year, with marginally higher utilization levels.
KeyBanc acknowledged the potential for long-term growth in Progyny but cautioned that the company's projections might be overly optimistic. The analyst pointed out that while they still believe in the company's growth story, the consensus estimates for the next 12-14 months might be set too high, even after adjustments post recent earnings.
KeyBanc's own forecasts for Progyny's growth are more conservative, estimating an increase of about 8% next year and approximately 11% in fiscal year 2026, which fall below the consensus.
The analyst highlighted that Progyny benefited from several tailwinds in the past few years, including what they believe was a multiyear advance in egg retrievals and freezing services from legacy technology clients due to concerns over potential layoffs. KeyBanc suggested that these factors may not be as influential in the future, which could impact the company's growth trajectory.
Progyny reported a record second-quarter 2024 revenue of $304.1 million, marking a 9% increase from the previous year. Despite this growth, the company has adjusted its revenue guidance for the second half of the year due to a change in the number of Assisted Reproductive Technology (ART) cycles per utilizing member and minor client workforce reductions. Progyny Inc . continues to focus on its long-term growth strategy, with plans to launch new products in 2025.
The company recently acquired April, a Berlin-based facility benefits platform, and partnered with Meritene Health, in efforts to expand its global offerings. Progyny Inc. also announced a $100 million share repurchase program. Investors are keenly awaiting the company's Investor Day, scheduled in New York City, where future plans and market opportunities will be discussed.
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