Progyny: Still The Clear Market Leader (NASDAQ:PGNY)

Fiscal 12 months 2022 was one other great 12 months for Progyny (NASDAQ:PGNY). The corporate continued to develop income at an impressive tempo. Consumer rely grew in addition to did the variety of lined lives.

Given the present financial local weather, it was great to see that the corporate has a really broad and numerous vary of purchasers. The under graph from a latest presentation reveals how numerous Progyny’s purchasers actually are:

This extra graph depicts the assorted industries being served by Progyny:

I imagine the corporate is heading into fiscal 12 months 2023 with a whole lot of optimistic momentum regardless of the financial uncertainly and the potential looming recession.

It is a agency offering an essential profit to many within the present workforce and I believe Progyny has confirmed and can proceed to show that this agency is the market chief in the case of offering fertility advantages and household constructing options.

New Providing

Progyny lately introduced the enlargement of male fertility advantages. In accordance with the corporate, about one third of infertility circumstances are because of male-factor infertility points (comparable to being unable to create or launch wholesome sperm). Progyny already had been masking a number of remedies for male associated infertility by its reproductive endocrinology and infertility (REI) community. Now Progyny is offering a community of reproductive urologists (RU). Progyny has vetted every RU and imagine they’ve a community of world-class physicians.

Concerning this new providing, the CEO said, “Infertility impacts tens of millions of individuals and sperm associated infertility accounts for a large portion, but a lot of the dialog and duty falls to the feminine inhabitants. At Progyny, we work to deal with all areas of infertility to supply the most effective providers and coverings attainable to make sure everybody’s goals of parenthood are realized. Increasing our male fertility providing to incorporate a RU community of best-in-class physicians is a crucial step to furthering this mission.”

I believe it is a new thrilling providing which can solely add to the group’s superior fertility profit options.

Financials and Key Metrics

In This fall 2022, Progyny had one other very stout quarter as income grew to over $214M, which is a rise of 68% in comparison with Q3. Most of this income was generated from fertility advantages providers income and pharmacy advantages providers income accounted for the remainder. Fertility advantages providers income was roughly $143 million, a rise of 60% in comparison with prior 12 months’s fourth quarter. The rise in purchasers in lined lives helped drive this development. Pharmacy advantages providers income was roughly $71 million for the quarter, a rise of 86% in comparison with prior-year fourth quarter. The expansion was because of the enhance within the variety of purchasers.

Consumer rely continues to rise in addition to Progyny completed This fall 2022 with 288 purchasers, which represented a median of 4.7 million lined lives. This compares to 191 purchasers and a pair of.9 million lined lives in This fall 2021, reflecting a 60% enhance during the last 12 months.

When it comes to utilization, a report 12,200 artwork cycles have been carried out in This fall 2022, which is a 60% enhance in comparison with This fall 2021.

This slide from a presentation in early 2023 actually reveals it is a robust enterprise and has been driving income and profitability for a number of years:

These are spectacular monetary outcomes which I imagine will probably proceed as demand for these advantages will solely proceed to rise.

Valuation

Progyny continues to be an costly inventory because it has a trailing P/E ratio of roughly 100. Presently, most analysts view Progyny both as a “Robust Purchase” or a “Purchase”, however none at the moment have a “Promote” score. Additionally, primarily based on many analysts’ projections, the present inventory worth is way under analyst worth targets.

It is a excessive valuation, however it’s a nice enterprise. However, I’d anticipate share worth to drop earlier than including extra shares.

Quick Stories

Progyny has been the goal of brief stories from numerous companies comparable to Jehoshaphat Analysis and Spruce Level Capital Administration. I’d urge traders to maintain a degree head and due the required due diligence earlier than making any hasty promote choices. In my expertise, I’ve discovered these companies don’t have the important perception to make such allegations nor do they possess the required accounting acumen.

With a 10K assertion, I at all times evaluate the report supplied the agency’s impartial auditor. This report at all times supplies an audit opinion and describes the agency’s important audit issues (CAMs). For every CAM, the agency will focus on the matter and can focus on how the matter was addressed throughout the course of the audit.

Ernst & Younger supplied Progyny with a transparent opinion and described the CAM in query throughout this audit.

Since Erica Williams has taken over because the Chair of the Public Firm Accounting In a single day Board (PCAOB) a number of massive charges have been handed all the way down to dangerous actors with the accounting occupation. Given the intense nature of accounting fraud, I imagine impartial auditors are doing the required work to make sure a shopper’s monetary info is introduced pretty.

Within the case of Progyny, I belief the agency’s administration and their impartial auditor way over I belief a “analysis agency” that could be attempting to make a fast buck.

Conclusion

Millennials are the biggest working era and because the firm’s CEO talked about on the final earnings name, the demand for fertility profit amongst millennials is “stronger than ever!” I agree with that assertion and completely imagine this will likely be a profit increasingly employers will present to their staff over the subsequent decade.

I nonetheless imagine Progyny has a superior providing with confirmed outcomes and with decrease prices in comparison with different suppliers and the enlargement of male fertility advantages will solely add to Progyny’s superior array of choices.

I’m not involved concerning the numerous brief stories on Progyny nevertheless I do assume the valuation for this firm is kind of excessive. Ideally, I’d wish to see this firm’s inventory worth drop under $30 a share earlier than shopping for.

I really feel the group is poised to proceed to develop shopper rely and income in addition to enhance their variety of lined lives. An financial slowdown might negatively impression Progyny within the present 12 months however for long-term shareholders I imagine Progyny will proceed to excel.