Shares of Progyny (PGNY +0.26%) were crashing 30.1% lower as of 11:22 a.m. ET on Thursday. The steep decline came after the fertility benefits provider disclosed in a regulatory filing that it was losing an unnamed major client.
Progyny said that the client "confirmed they had no issues of concern over the course of its multiyear relationship with the Company, including member satisfaction or quality of service or outcomes." It also noted that there have been no disputes with the large client.
NASDAQ: PGNY
Key Data Points
How much will the loss of this client hurt Progyny?
The major client's services agreement with Progyny will remain in effect through the rest of 2024. As a result, Progyny doesn't expect any negative impact on its financial results for the current fiscal year.
However, the client generated 12% of Progyny's revenue over the six months ending June 30, and 13% over the 12 months ending Dec. 31, 2023. Progyny stated that the client makes up an undisclosed smaller percentage of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
The company will definitely feel some effects of the loss next year. Still, though, Progyny said that it continues to project an increase in overall member count in both 2024 and 2025.
Is Progyny stock a good pick to buy on the dip?
Some brave investors could be interested in scooping up shares of Progyny after its latest bad news. However, I think the prudent thing to do is remain on the sidelines until there's more clarity on the company's growth prospects.
