Infertility affects nearly 1 in 5 couples seeking to start a family, yet many struggle to access adequate coverage and support through existing health plans.

This is a significant issue, as 1 in 5 women of childbearing age also have two or more chronic health conditions, which can further complicate conception and pregnancy.

At the same time, inclusive benefit programs are increasingly important to today’s workforce. A strong majority (80%) of employees indicate they want to work for companies that prioritize such inclusive offerings.

This presents an opportunity for employers to support all types of families while also attracting and retaining top talent.

Progyny (PGNY) aims to fill this gap as one of the leading fertility benefits providers.

By providing comprehensive and easy-to-use coverage, the company helps ensure all individuals and families can access high-quality care services to build the family of their dreams.

Progyny started by bringing much-needed organization and guidance to what was previously an uncoordinated system.

It created a nationwide network of top-rated fertility clinics that provide holistic, evidence-based care to members.

The company also developed proprietary technology and care management programs to streamline the process and support members every step of the way.

This integrated approach has resonated tremendously with both individuals and employers.

By the end of 2023, Progyny managed benefits for over 6.7 million covered lives across more than 460 employers and 45 industries.

17% of the Fortune 500 are Progyny clients today, including names like Microsoft (MSFT) and Alphabet (GOOGL).

The results Progyny delivers have been impressive. For members who use its services, the live birth rate is over 72% for IVF – significantly higher than the national average.

Because of this, Progyny managed to keep almost all of its clients, achieving a nearly 100% retention rate annually. These clients keep increasing their benefits yearly by around 20% to 25%.

These factors pushed the company to have a 75% revenue CAGR between 2016-2023.

Progyny’s impressive financial performance, materialized by a 29% Uniform return on assets ”ROA” and 61% asset growth, starkly contrasts its modest market valuation. The company trades around 18x Uniform P/E, below the corporate average.

The market is concerned about competition and healthcare regulations.

However, Progyny has grown 7x faster than the market, rapidly accumulating market share.

While short-term risks exist, the company’s recurring revenue business model and potential for deepening employer partnerships present compelling opportunities for future growth.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Strategist &
Director of Research
at Valens Research