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Beauty Health (SKIN)
NASDAQ:SKIN
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Beauty Health
(NASDAQ:SKIN)
Rating:56Neutral
Price Target:
$1.50
▼(-7.98%Downside)
Positive Factors
Financial Performance
Beauty Health's first-quarter sales exceeded expectations despite macroeconomic pressures.
Operational Improvements
Gross margin and adjusted EBITDA were above expectations due to the company's focus on operational improvements.
Negative Factors
Macroeconomic Conditions
Challenging macroeconomic conditions, especially outside the United States, led to a (40.0%) year-over-year decline in equipment sales.
Sales Model Transition
The company plans to switch to a distributor model from a direct sales model during 2025, which is expected to have a $10-15 million negative impact on revenue.
Beauty Health (SKIN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$205.40M
Dividend YieldN/A
Average Volume (3M)918.32K
Price to Earnings (P/E)―
Beta (1Y)1.39
Revenue Growth-17.97%
EPS Growth49.13%
CountryUS
Employees769
SectorConsumer Cyclical
Sector Strength77
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)-0.08
Shares Outstanding126,012,450
10 Day Avg. Volume517,569
30 Day Avg. Volume918,319
Financial Highlights & Ratios
PEG Ratio2.80
Price to Book (P/B)4.49
Price to Sales (P/S)0.00
P/FCF Ratio25.22
Enterprise Value/Market Cap2.11
Enterprise Value/Revenue0.30
Enterprise Value/Gross Profit2.38
Enterprise Value/Ebitda-15.99
Forecast
1Y Price Target
$1.56Price Target Upside-4.29% Downside
Rating ConsensusHold
Number of Analyst Covering6
Beauty Health Business Overview & Revenue Model
Company DescriptionThe Beauty Health Company designs, develops, manufactures, markets, and sells aesthetic technologies and products worldwide. The company's flagship product includes HydraFacial that enhance the skin to cleanse, peel, exfoliate, extract, infuse, and hydrate the skin with proprietary solutions and serums. Its products also comprise Syndeo, a HydraFacial Delivery System designed to elevate every part of the treatment and connects providers to the consumer's preferences to create a more personalized experience; HydraFacial Nation App, an app that allows consumers to learn about their skin health, discover treatment options, and track their treatments over time; and Keravive, a treatment for scalp health. The company was founded in 1997 and is headquartered in Long Beach, California.
How the Company Makes MoneyBeauty Health primarily generates revenue through the sale of its HydraFacial systems and related consumables. The company's revenue model is based on a combination of equipment sales and recurring revenue from the consumables used in the treatments. This includes serums, tips, and other accessories necessary for the HydraFacial procedures. Additionally, Beauty Health leverages a network of partnerships with spas, dermatologists, and aesthetic professionals who offer their treatments, which helps in expanding their market reach and driving sales. The company may also engage in strategic collaborations to enhance its product offerings and market penetration, contributing to its overall financial performance.
Beauty Health Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 31.45%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a positive start to the year with revenue and EBITDA exceeding expectations and strong growth in consumables. However, there are significant challenges, including a substantial decline in equipment sales, regional revenue declines, and the impact of tariffs on operations in China. Despite these challenges, the company's strategic initiatives and strong product launches provide a positive outlook.Q1-2025 Updates
Positive Updates
Exceeding Revenue and EBITDA Guidance
The company exceeded its revenue expectations at $69.6 million, above the high end of its guidance, and delivered over $7 million of adjusted EBITDA.
Strong Consumable Sales
Consumables grew over 8% and now represent over 70% of the company's revenue. Consumable net sales increased 3.5% in the Americas, 42.6% in APAC, and 7.9% in EMEA.
Successful Product Launches
The Hydralock HA booster launched in the second half of 2024 marked the most successful branded booster launch in the company's history.
Improved Gross Margin
Adjusted gross margin for the quarter was 71.9% compared to 63.4% in the prior year period, driven by a favorable mix towards consumable net sales and improved operational processes.
Increased Active Devices
Total active devices in the field increased to over 35,000 units versus approximately 32,500 units at the end of Q1 2024.
Negative Updates
Decline in Equipment Sales
Global device sales declined by 43.5% year-over-year due to macroeconomic pressures impacting capital equipment purchasing decisions.
Revenue Declines in Key Regions
Q1 consolidated revenue in the Americas was down 8.1%, while revenue across APAC and EMEA declined by 30.4% and 21.6%, respectively.
Tariff Impact on China Operations
The transition to a third-party distribution model in China is underway, but the company expects approximately $5 million of additional cost in 2025 due to tariffs.
Operating Loss
The company reported an operating loss of $12 million in Q1 2025, an improvement versus a loss of $17 million in the comparable period.
Company Guidance
During the Beauty Health Company's Q1 2025 earnings call, CEO Marla Beck highlighted that the company exceeded revenue expectations, reporting $69.6 million compared to their guidance. The adjusted EBITDA was over $7 million, driven by a favorable shift toward high-margin consumables, which grew over 8% and now represent more than 70% of total revenue. The company saw an increase in active devices to over 35,000 units, up from approximately 32,500 units in Q1 2024, indicating strong demand for Hydrafacial devices. Adjusted gross margin was reported at 71.9%, a significant improvement from the previous year. Looking forward, the company maintained its full-year 2025 sales guidance between $270 million and $300 million, with adjusted EBITDA projected at $15 million to $25 million, despite macroeconomic pressures impacting equipment sales.Beauty Health Financial Statement Overview
Summary
Beauty Health faces challenges in achieving profitability and managing high levels of debt. While there are signs of operational efficiency and improved cash flow, the financial risk remains high due to leverage. Continued focus on reducing losses and managing debt levels will be crucial for long-term stability.Income Statement
Beauty Health's revenue has shown some fluctuations with a current decrease from $397.99M in 2023 to $334.29M in 2024. The company has consistently reported negative net income and EBIT, indicating profitability challenges. However, the gross profit margin remains positive, suggesting some level of operational efficiency.50
Neutral
Balance Sheet
The company exhibits high leverage with a debt-to-equity ratio over 10x, which poses a significant financial risk. The equity ratio has been declining, indicating a shrinking equity base relative to total assets. Despite these challenges, the company maintains a substantial cash position.40
Negative
Cash Flow
Operating cash flow turned positive in 2024, indicating improved cash generation. However, free cash flow growth is inconsistent, and cash flow from financing activities is negative, reflecting significant debt repayments or reductions in capital funding.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 334.29M | 397.99M | 365.88M | 260.09M | 119.09M | Gross Profit |
| 182.30M | 155.11M | 250.34M | 181.83M | 67.20M | EBIT |
| -67.77M | -130.92M | -24.28M | -36.64M | -17.18M | EBITDA |
| 10.34M | -56.00M | 80.75M | -344.44M | -2.81M | Net Income Common Stockholders |
| -29.10M | -100.12M | 44.22M | -375.11M | -29.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 370.06M | 523.02M | 568.20M | 901.89M | 9.49M | Total Assets |
| 685.68M | 929.11M | 1.01B | 1.22B | 222.84M | Total Debt |
| 568.16M | 752.29M | 751.79M | 729.91M | 216.54M | Net Debt |
| 198.09M | 229.26M | 183.59M | -171.97M | 207.05M | Total Liabilities |
| 633.88M | 869.72M | 837.43M | 916.51M | 252.79M | Stockholders Equity |
| 51.80M | 59.39M | 171.48M | 302.30M | -29.96M |
| Cash Flow | Free Cash Flow | |||
| 9.34M | 8.70M | -123.99M | -43.98M | -16.25M | Operating Cash Flow |
| 16.13M | 21.75M | -106.60M | -28.36M | -12.44M | Investing Cash Flow |
| -6.79M | -31.51M | -18.87M | -37.73M | -3.82M | Financing Cash Flow |
| -158.34M | -37.45M | -205.24M | 959.03M | 18.27M |
Beauty Health Technical Analysis
Positive
1.63
Price Trends
1.29
Positive
1.42
Positive
1.49
Positive
Market Momentum
0.11
Positive
54.67
Neutral
31.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKIN, the sentiment is Positive. The current price of 1.63 is above the 20-day moving average (MA) of 1.56, above the 50-day MA of 1.29, and above the 200-day MA of 1.49, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 54.67 is Neutral, neither overbought nor oversold. The STOCH value of 31.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKIN.
Beauty Health Risk Analysis
Beauty Health disclosed 94 risk factors in its most recent earnings report. Beauty Health reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Actions of activist stockholders could be costly and time-consuming, divert management's attention and resources, and have an adverse effect on our business. Q4, 2024
2.
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. Q4, 2024
3.
We have identified a material weakness in our internal control over financial reporting that could negatively impact our financial condition. Q4, 2024
Beauty Health Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.30B | 16.12 | 5.53% | 2.17% | -2.11% | -28.79% | |
68 Neutral | $280.99M | 24.93 | 11.85% | ― | -2.93% | -17.72% | |
63 Neutral | $616.93M | 4.98 | 7.45% | ― | -4.93% | -23.61% | |
62 Neutral | $6.90B | 11.12 | 2.92% | 3.89% | 2.68% | -25.06% | |
60 Neutral | $4.30B | 40.12 | -10.58% | ― | -1.68% | -302.11% | |
56 Neutral | $205.40M | ― | -70.44% | ― | -17.97% | 49.13% | |
54 Neutral | $426.43M | ― | -4.93% | 2.78% | -11.85% | -1080.00% |
* Consumer Cyclical Sector Average
Performance Comparison
SKIN
Beauty Health
1.60
-0.55
-25.58%
HELE
Helen Of Troy
26.26
-80.05
-75.30%
NUS
Nu Skin
8.33
-4.81
-36.61%
COTY
Coty
4.87
-5.33
-52.25%
EPC
Edgewell Personal Care
25.84
-12.55
-32.69%
EWCZ
European Wax Center
5.16
-6.46
-55.59%
Beauty Health Corporate Events
Private Placements and Financing
Beauty Health Issues $250M Convertible Notes
Neutral
May 27, 2025
On May 27, 2025, The Beauty Health Company issued $250 million in 7.95% Convertible Senior Secured Notes due 2028, which are senior secured obligations guaranteed by certain subsidiaries and secured by substantially all assets of the company. This financial move is significant for the company’s operations as it provides liquidity and flexibility, allowing noteholders the option to convert notes into common stock, with provisions for adjustments in conversion rates upon certain corporate events, potentially impacting stakeholders by altering the company’s capital structure and market positioning.
The most recent analyst rating on (SKIN) stock is a Hold with a $1.20 price target. To see the full list of analyst forecasts on Beauty Health stock, see the SKIN Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
Beauty Health Refinances Debt to Strengthen Position
Positive
May 21, 2025
On May 21, 2025, The Beauty Health Company announced it had entered into exchange agreements to refinance its debt, exchanging $413.2 million of existing convertible notes for $250 million of new senior secured notes due 2028 and $143.4 million in cash. This move aims to strengthen the company’s financial position and extend debt maturity, allowing for greater investment in growth strategies, including product development and brand initiatives.
The most recent analyst rating on (SKIN) stock is a Hold with a $1.20 price target. To see the full list of analyst forecasts on Beauty Health stock, see the SKIN Stock Forecast page.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.