Analyst Michael Cherny of Leerink Partners reiterated a Hold rating on Progyny (PGNY – Research Report), boosting the price target to $28.00.
Michael Cherny has given his Hold rating due to a combination of factors influencing Progyny’s current and future performance. While the company exceeded its quarterly guidance and showed promising revenue growth, particularly in the fourth quarter, there are still concerns about the sustainability of these trends. The revenue guidance for FY25 surpassed expectations, but it includes a significant amount of Amazon’s run-off revenue, which introduces uncertainty in the growth timeline.
Additionally, despite the revenue upside, there was no corresponding increase in EBITDA due to planned growth investments. These investments, while necessary for new service roll-outs, were larger than initially anticipated. Although the company is on a stronger footing compared to the previous year, with robust new member growth and service expansion, Cherny remains cautious about the long-term consistency of improved utilization patterns, especially in light of current stock valuation dynamics. Consequently, while the price target was raised from $20 to $28, the Market Perform rating was maintained.
Cherny covers the Healthcare sector, focusing on stocks such as Walgreens Boots Alliance, CVS Health, and Hims & Hers Health. According to TipRanks, Cherny has an average return of 3.6% and a 52.45% success rate on recommended stocks.
In another report released on February 28, Canaccord Genuity also maintained a Hold rating on the stock with a $23.00 price target.