Shares of performance beauty company, Evolus Inc. (EOLS) have surged 37.3% so far this year. Its botulinum toxin type A injection, Jeuveau, is the only FDA-approved neurotoxin on the market dedicated to aesthetics. Evolus’ recent fourth-quarter performance missed the Street’s expectations despite robust growth in its top-line.
On the back of robust Jeuveau sales, revenue jumped 68.4% year-over-year to $34.7 million, but missed the Street’s estimates by $118 thousand. Net loss per share at $0.24 came in wider than analysts’ expectations by $0.05. The total customer accounts with the company increased by 400 during the quarter to 7,000.
Evolus has been focused on driving visibility and ran over 2,300 individualized co-branded marketing campaigns during the year, yielding upwards of 1 billion impressions. This was an impressive 20X jump in the number of impressions as compared to the previous year.
Looking ahead, for 2022, the company sees revenue landing between $143 million and $150 million, indicating growth of between 43% and 50%. Further, Evolus will be participating in the Barclays Global Healthcare Conference on March 15.
With these developments in mind, let us take a look at the changes in Evolus’ key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Evolus’ top risk category is Finance & Corporate, contributing 20 of the total 55 risks identified for the stock.
In its recent report, the company has added one key risk factor under the Finance & Corporate risk category. Compared to a sector average of 15 Finance & Corporate risk factors, Evolus’ is at 20.
Evolus noted that the planned discontinuation of London Interbank Offer Rate (LIBOR) could adversely impact its operations. At the end of December 2021, the company had $71.2 million in outstanding debt, bearing interest at a floating rate using LIBOR as the reference rate.
The discontinuation of LIBOR would lead to changes in how interest is calculated on Evolus’ floating rate debt, including its term loans. Uncertainties exist regarding the transition from LIBOR to an alternative benchmark rate. The consequences of the changes associated with LIBOR cannot be fully predicted, and may result in a higher cost of variable rate debt for Evolus.
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have increased holdings in Evolus by 392.8 thousand shares in the last quarter, indicating a neutral hedge fund confidence signal in the stock. Larry Robbins’ Glenview Capital Management has a holding worth ~$2.56 million in Evolus.
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