Since entering into the public market last October, shares of Progyny Inc. (PGNY, Financial), a company specializing in providing fertility and family benefits solutions for U.S. employers, have doubled. New York City-based Progyny is a former CNBC “Disruptor Stock,” which is a company that has the potential to create, transform and disrupt whole industries. Investors seem to agree with this assessment. The company, trading at about $31, has a market cap of $2.5 billion.
Company sales are growing at a healthy pace. The company’s third-quarter revenue was more than $61 million, up 120% from the same period a year earlier. Gross profit was $12.3 million, an increase of 144% from the prior year period. Gross margin was up nearly 2%, due primarily to increased operating efficiencies. However, the company had a net loss of $8.2 million, or $1.10 per share.
Progyny is in a rapidly growing business. About 10% of the women in the U.S. ages 15 to 44 have difficulty getting pregnant or staying pregnant, according to the Centers for Disease Control and Prevention (CDC). The continuous fall of fertility rates, delay of pregnancies in women and technological advancements related to fertility treatments are driving the global fertility services market. It is forecast to grow at a compound annual rate of nearly 9%, reaching more than $27 billion by 2026.
In terms of cycle type, in-vitro fertilization with intracytoplasmic sperm injection accounted for more than half of the total share of global fertility services market in 2018, and is estimated to continue its dominant position and growth rate through 2026.
Based on region, Asia-Pacific held the highest share of the market in 2018, followed by North America, which accounts for nearly two-fifths of the global fertility services market. Asia-Pacific will also see the fastest growth rate.
Progyny’s success could pave the way for additional fertility benefits companies, as identified by Feedspot. Four similar companies that investors might want to follow the progress of are:
- Univfy. The Los Alto, Californa-based company is trying to make the risk of IVF more manageable for patients by using machine learning algorithms to predict the likelihood of success. The startup raised a $6 million series A round in 2018.
- Maven Clinic. The company calls New York City home. It offers a virtual clinic that enables women to use video chat or messaging to communicate with physicians. The startup raised $27 million in a funding round led by Sequoia Capital and Oak HC/FT in 2018 to build out its platform.
- Future Family. This is a San Francisco-based company providing subscription-based fertility plans that offer a wide variety of services designed to make care more accessible to families. The company raised a $10 million series A round in October 2018. It acquired an additional $100 million in debt financing from Atalaya Capital later that year
- Advantia Health. Based in Arlington, Virginia, Advantia raised a $45 million round last month. The company focuses on providers and has acquired OB/GYN practices across the Midwest and the East Coast, with a total of 50 offices employing 200. Advantia added a technology arm to its business last year, acquiring Pacify, a telemedicine startup that provides post-partum support.
Six analysts rate the company a strong buy, even though it’s selling at just about its target price. The stock might be a little frothy for investors thinking about jumping in now. They might want to see if enthusiasm for Progyny wanes a bit.
Disclosure: The author holds no positions in any of the companies mentioned in this article.
Read more here:
- J&J Brand Most Valuable Among Pharmaceutical Companies
- Merck Shares Drop After Spinoff Announced
- Goldman Sachs Sets BioMarin Target 75% Above Current Price
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
