Progyny
stock was falling sharply Wednesday after the fertility-solutions company provided a disappointing revenue outlook. Meanwhile, management ensured investors that it doesn’t believe the Alabama court ruling on in vitro fertilization will have negative impacts on the company.
Progyny’s financial results come after the Alabama Supreme Court ruled earlier this month that frozen embryos are children. On the company’s earnings call after the stock market closed on Tuesday, CEO Peter Anevski said he doesn’t think the ruling will have an impact on the overall industry, and doesn’t believe any other legislation will make a decision like this.
“Since the ruling, PGNY has seen bipartisan comments that support IVFs across the country on both a federal and state level,” wrote Truist Securities analyst Jailendra Singh in a report. He trimmed his price target on Progyny stock to $46 from $47, and has an Overweight rating. “Overall, PGNY believes this ruling would not impact IVFs like the Roe v. Wade overrule.”
The company said that it expects first-quarter revenue of $285 million to $292 million, while analysts had expected $312.3 million, according to FactSet. Revenue guidance for 2024 ranged from $1.29 billion to $1.32 billion, with the midrange appearing to be just shy of the $1.31 billion Wall Street had expected.
Shares of
Progyny
were falling 17% to $34, the stock’s largest percentage decrease since Feb. 25, 2021, according to Dow Jones Market Data. The stock has dropped 11% over the last 12 months.
The disappointing guidance wasn’t because of the recent Alabama court ruling on IVF, Progyny said, noting that there is typically a decline in member activity in December due to holidays and clinic closures. However, the actual decline in the month this year was “slightly more than we had anticipated.”
“There was a brief shift in treatment mix at the start of the year, which we estimate resulted in an approximately $15 million headwind on revenue in the quarter,” CEO Peter Anevski said on the earnings call. He added that this type of mix shift has only happened once before since the company went public in 2019, and it’s “always been short lasting, and has reverted thereafter to the more typical distribution of treatments.”
For the fourth quarter, Progyny reported earnings of 13 cents a share on revenue of $269.9 million, while analysts had expected earnings of 11 cents a share on revenue of $274.1 million.
J.P. Morgan analyst Anne Samuel maintained an Overweight rating on Progyny stock with a $49 price target. “We believe PGNY has a solid backdrop to execute in as management controls what it can control,” she said.
Write to Angela Palumbo at [email protected]
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