Shares of leading fertility and women's health benefits manager Progyny (PGNY +0.26%) are up 18% as of 11 a.m. ET on Friday, according to data provided by S&P Global Market Intelligence.
Progyny reported third-quarter earnings Thursday afternoon and sailed past analysts' expectations, leading to today's soaring stock price.
NASDAQ: PGNY
Key Data Points
The company's all-important "selling season" in Q3 saw sales increase by 9%, while management expects its client count and covered lives to rise by 13% apiece once all new clients go live in 2026.
However, these numbers may be even stronger than they appear, as Progyny lost Amazon as a major customer one year ago. Adjusting for this departure, Progyny's sales really grew by an exceptional 23%.
While losing Amazon was seen as a black eye for Progyny's stock over the last year, I'd argue Amazon seems more focused on cutting costs and trimming its workforce than on offering top-tier benefits like Progyny's. And this quarter's exceptional growth seems to back this notion.
Image source: Getty Images.
Progyny remains best in class
Home to an incredible Net Promoter Score of 82 (one of the best I've ever seen), Progyny continues to gain traction not only in the United States but across the globe.
Maintaining a near-100% client retention rate -- while 30% of its clients grew their benefits in some way with Progyny last year -- the company continues to prove indispensable to its customers and their employees (barring Amazon).
Despite its solid growth, Progyny still only trades at 10 times free cash flow (FCF). However, when its stock-based compensation is taken into account, this ratio rises to 30.
Now armed with a net cash balance of over $300 million, ample FCF generation, and a $200 million stock buyback, Progyny seems to have a bright future.
