Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Progyny, Inc. (NASDAQ: PGNY) is a benefit management company. The Company specializes in fertility and family building benefits solutions in the United States. The Company’s clients include various employers across an array of industries. It has contracts to provide coverage to approximately 6.4 million employees and their partners (known as members). The Company provides its benefits through its proprietary Smart Cycle approach.

Kalkine’s US Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 12.66% in the last three months as well as by 7.33% in past nine months.
• The stock is leaning towards the lower band of its 52-week range of USD 44.95 and 52-week low price of USD 23.90, with the current price near an important support zone of USD 26.00-USD 28.00, with expectations of upward momentum, if these levels sustains.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 48.88.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~51.91% of the total shareholding, signifying concentrated shareholding. BlackRock Institutional Trust Company, N.A., and The Vanguard Group, Inc. are the biggest shareholders, holding the maximum stake in the company at ~10.04% and ~8.71%, respectively.

1.4 Key Metrics:

PGNY has demonstrated substantial financial growth over the past five years, with revenue soaring from USD 229.7 million in 2019 to USD 1,088.6 million in 2023, achieving a compound annual growth rate (CAGR) of 10.33%. Gross profit increased significantly from USD 45.5 million to USD 238.8 million during the same period, reflecting a higher CAGR of 12.31%. Despite some fluctuations, the gross margin percentage remained relatively stable, rising from 19.81% to 21.94%. This performance indicates effective cost management and operational efficiency, as the company has managed to enhance gross profit at a faster rate than revenue growth while maintaining a steady gross margin.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q1FY24:

Section 3: Key Risks & Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 12.66% in the last three months as well as by 7.33% in past nine months.
• The stock is leaning towards the lower band of its 52-week range of USD 44.95 and 52-week low price of USD 23.90, with the current price near an important support zone of USD 26.00-USD 28.00, with expectations of upward momentum, if these levels sustains.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 48.88.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 31, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.