Jefferies lowers Progyny price target to $24, calls selloff ‘excessive’

Jefferies analyst Glen Santangelo lowered the firm’s price target on Progyny to $24 from $31 and keeps a Buy rating on the shares. After a disappointing June, utilization trends remain “unexplainably” bad in July and August while the disclosure of the loss of the company’s largest customer has the shares down “significantly,” the analyst noted. The firm is lowering its forecast for FY25 revenue growth from 17% to 5%, as it now estimates Progyny will add about 1.2M members in the current selling season, offset by the 670,000 members lost, and is lowering its FY25 and FY26 EBITDA estimates to $216M and $251M from $244M and $278M, respectively. However, Jefferies adds that the firm views the selloff as “excessive at this point,” and believes management should consider strategic alternatives and consider a leveraged buyout. The firm notes that its revised price target assumes the company has a good selling season, utilization improves, and the multiple expands closer to 10-times FY25 EBITDA.