Balanced Outlook for Beauty Health: Promising Leadership and Strategic Initiatives Amidst Macroeconomic Challenges

Oliver Chen, an analyst from TD Cowen, maintained the Hold rating on Beauty Health. The associated price target was lowered to $1.50.

Oliver Chen has given his Hold rating due to a combination of factors that reflect both optimism and caution regarding Beauty Health’s future performance. The company is showing promising signs under new leadership with a focus on profitability and margin expansion by FY26, driven by enhanced operational discipline and improved data systems. The strategic initiatives to protect and grow the brand, particularly through innovation in consumables and operational improvements, are seen as positive steps.
However, Chen remains cautious due to ongoing challenges such as declining device sales influenced by macroeconomic factors and higher device churn rates. Despite the company’s unique positioning in the market and potential for growth, these issues, along with a lower adjusted EBITDA margin compared to previous quarters, suggest a balanced outlook. The valuation remains relatively inexpensive, but the near-term dynamics, including device sales trends and efforts to improve gross margins, warrant a Hold rating as the company navigates these complexities.