In a report released today, Oliver Chen from TD Cowen maintained a Hold rating on Beauty Health, with a price target of $2.50.
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Oliver Chen has given his Hold rating due to a combination of factors that reflect both opportunities and challenges for Beauty Health. The company is undergoing a strategic reset under new leadership, focusing on innovation, commercial discipline, and strengthening provider partnerships. This reset aims to manage device sales churn and foster consumables innovation, which currently makes up a significant portion of their revenue. The company has also seen progress in its U.S. commercial organization, with a revamped salesforce showing improvements in account targeting and execution.
Despite these positive developments, there are concerns that temper the outlook. The company faces pressure from declining device sales and a softer operating margin, which weigh on the stock’s valuation. Additionally, the leverage remains high, with a net debt to adjusted EBITDA ratio of approximately 4x. While there is potential for consistent free cash flow by FY26, the current financial metrics and market conditions justify a Hold rating, as the company is still in the early stages of its growth recovery.
In another report released on September 5, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $2.00 price target.