A Unique Play in the Fertility Industry
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Here's the podcast episode for this post
Progyny Inc. (NASDAQ: PGNY) is a healthcare company that provides fertility treatment to couples looking to have a baby. As people start to have kids at a later age for many reasons, many couples struggle to have babies once they feel that they're ready to have a baby. This is a phenomenon that has become more prevalent, making the fertility treatment industry grow immensely.
The Case
According to Progyny's investor presentation, management believes that the company is the leader in the fertility treatment industry. Also, management has said that the fertility treatment industry is underpenetrated. What that means is that the industry has a lot of opportunities yet there isn't enough attention to consuming the whole opportunity.
Strong Network
One thing that popped out in the investor presentation is that the company has partnered with many big companies to provide fertility treatment to its workers as many of those companies believe that providing fertility treatment can help their employees become more productive.
Management notes that their client list consists of:
"20 of top 30 in technology"
"14 of top 20 in consumer retail"
"9 of top 15 in industrial"
"7 of top 15 in healthcare"
"7 of top 10 in media"
"4 of top 10 in insurance"
"3 of top 10 in legal"
And many more.
That is an impressive list of companies that they work with. The amount of people working in those companies is big. Having those companies as their clients gives them access to a huge number of people that could potentially need fertility treatment.
The Impact On People
According to Progyny, Progyny's fertility treatment plays a role in people's wellbeing. In their investor presentation, Progyny mentions that the traditional fertility treatment approach comes with less success. The failures from fertility treatment from the conventional approach cost employers billions as employees become less productive due to the sadness of not being able to have a baby. Because Progyny has a much higher success rate in its approach, many companies choose to do business with Progyny in hopes of not only giving their employees access to better fertility treatment but to also reduce the losses in productivity from the failures of fertility treatment.
When Progyny said that they were the leader in the fertility treatment market, well, they weren't lying.
Progyny has around 800 fertility specialists and around 600 clinics. That shows that Progyny has a large physical footprint.
Progyny RX
Interestingly, Progyny also has a pharmacy business as well. According to the investor presentation, 70% of Progyny's clients use the pharmacy. This pharmacy gives clients medications to help improve fertility treatment. This pharmacy, known as Progyny RX, is a way for the company to upsell on its clients.
Signs of Growth in Accounting
For those of you wanting to know the company's growth history, the company has been helping more clients every year and by helping more clients each year, the company has been able to earn more revenue each year. Also, as of FY 2019, Progyny is profitable according to its adjusted EBITDA. This company is a growth stock that is truly profitable.
Conclusion
Progyny is a great growth stock for any investors looking to take on risk. With the demand for fertility treatments growing, Progyny is the way to capitalize on it. Since it's a market leader, Progyny is a safer way of investing in the growing industry.
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