SKIN Stock Forecast & Price Target

Beauty Health Co demonstrated a promising financial performance in 4Q23, reporting revenue of $96.8 million, which surpassed previous estimates of $95.2 million and $88.0 million, primarily driven by stronger sales of consumables. Additionally, the average selling price (ASP) for total systems grew approximately 20% quarter-over-quarter to $28.8K, significantly exceeding earlier estimates of $24.3K, fueled by a higher percentage of direct sales. Although the EBITDA guidance remains back-end weighted, the overall trends in revenue and ASP growth indicate a strong upward trajectory for the company's financial health.

Beauty Health Co. has exhibited a concerning decline in its core delivery system placements, with new placements falling over 30% year-over-year and quarter-over-quarter, significantly below prior estimates, which raises red flags for future consumables sales. Additionally, management's guidance for Q1 2024 indicates anticipated sales of $80 million and an adjusted EBITDA of negative $7.5 million, both of which are well below previous market estimates and suggest a reliance on stronger performance in the back half of the year to meet full-year profitability targets. Various risks, including macroeconomic factors, competition, and execution challenges in their expansion initiatives, further contribute to a negative outlook for the company’s stock.