What Happened?
Shares of skincare company BeautyHealth (NASDAQ:SKIN) fell 11.7% in the afternoon session after the company reported underwhelming fourth-quarter results: its full-year revenue guidance missed significantly, disappointing investors. What stood out was BeautyHealth's sharp improvement in profitability, with adjusted EBITDA jumping nearly threefold year-over-year to $9 million. Despite this, sales declined 14% compared to the previous year, mainly due to a slowdown in delivery system sales, particularly in the Asia-Pacific region. Overall, this quarter was mixed but still had some key positives. The market seemed to focus on the negatives, and the stock traded down.
The shares closed the day at $1.35, down 4.9% from previous close.
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What The Market Is Telling Us
BeautyHealth’s shares are extremely volatile and have had 62 moves greater than 5% over the last year. But moves this big are rare even for BeautyHealth and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 18.2% on the news that the company reported impressive third-quarter earnings that blew past analysts' EBITDA and EBITDA guidance expectations. Notably, the company turned a profit while Wall Street had predicted a loss. Revenue also beat expectations, though sales declined relative to the previous year. The decline in revenue was primarily due to ongoing challenges in system sales, particularly in international markets like China. As a result, the company reduced its full-year sales outlook. To overcome some of the challenges impeding growth, the company revamped its commercial leadership team and appointed a new Chief Revenue Officer and Chief Marketing Officer with more relevant expertise. Also, it provided more flexible pricing for markets affected by high interest rates and limited financing availability. Overall, this was a mixed quarter.
BeautyHealth is down 19.9% since the beginning of the year, and at $1.29 per share, it is trading 71.5% below its 52-week high of $4.53 from March 2024.
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