Is Progyny (PGNY) Pricing Reflect Future Growth After Recent Share Price Weakness
- If you are wondering whether Progyny's current share price really reflects what the business is worth, this breakdown will help you connect the recent moves in the stock to what the numbers say about value.
- Progyny's share price closed at US$23.87, with returns of a 5.4% decline over the last 7 days, a 7.0% decline over the last 30 days, a 7.3% decline year to date, a 3.0% gain over the last year, a 32.9% decline over the last 3 years and a 52.2% decline over the last 5 years. These moves may have changed how investors are thinking about its risk and potential.
- Recent coverage has focused on how Progyny fits within the wider fertility benefits space and how changing sentiment around healthcare benefit providers has been filtering through to share prices. This context helps explain why the stock's returns have varied across different timeframes.
- Right now Progyny scores 4 out of 6 on our valuation checks. Next we will walk through the main valuation approaches that feed into that score, before finishing with a more holistic way to think about what the stock might be worth to you.
Approach 1: Progyny Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes estimates of the cash a company could generate in the future and discounts those amounts back to today, so you can compare that stream of cash to the current share price.
For Progyny, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $199.8 million. Analyst estimates and extrapolated figures suggest free cash flow projections between 2026 and 2035, reaching a projected $259.6 million in 2030, with later years extended by Simply Wall St rather than by analysts.
When those projected cash flows are discounted back to today, the DCF model arrives at an estimated intrinsic value of about $74.28 per share. Compared with the recent share price of US$23.87, this implies the stock is 67.9% undervalued according to this approach.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Progyny is undervalued by 67.9%. Track this in your watchlist or portfolio, or discover 871 more undervalued stocks based on cash flows.
Approach 2: Progyny Price vs Earnings
For a profitable business like Progyny, the P/E ratio is a useful way to relate what you pay for each share to the earnings the company is currently generating. It helps you see how many dollars of share price the market is assigning to each dollar of earnings.
What counts as a "normal" P/E depends on how the market views the company’s growth potential and risk. Higher expected growth or lower perceived risk can support a higher P/E, while lower growth expectations or higher risk generally point to a lower P/E.
Progyny is trading on a P/E of 36.38x. That sits above the Healthcare industry average of 21.98x, and below the average for its peer group at 44.05x. Simply Wall St’s proprietary Fair Ratio for Progyny is 22.67x, which reflects factors such as its earnings growth profile, industry, profit margins, market cap and specific risks.
The Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for Progyny’s own characteristics instead of assuming that all Healthcare stocks or direct peers deserve similar multiples. Compared with the current 36.38x P/E, the Fair Ratio of 22.67x suggests the shares are trading above what this model would consider fair.
Result: OVERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1420 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Progyny Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which connect your view of Progyny as a business with the numbers behind it. A Narrative is simply your story about the company, paired with your own assumptions for fair value, future revenue, earnings and margins, so that the story links directly to a forecast and then to an estimate of what the shares might be worth. On Simply Wall St, Narratives sit in the Community page, where millions of investors use them as an easy tool to compare their fair value to the current share price and decide whether the stock looks attractive or expensive on their terms. Narratives also update when new information such as earnings reports or major news is added to the platform, so your view can stay current without constant manual rework. For Progyny, one investor might set a Narrative with a relatively high fair value based on optimistic assumptions, while another might choose a much lower fair value based on more cautious expectations, and both can clearly see how their story translates into numbers.
Do you think there's more to the story for Progyny? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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