Why Progyny Shares Are Plunging Today

Actions of Progeny (PGNY -29.83%) they tumbled 30.1% lower as of 11:22 a.m. ET Thursday. The steep decline came after the fertility benefits provider disclosed in a regulatory filing that it was losing an unnamed major client.

Progyny said the client “has confirmed that it has had no issues of concern throughout its multi-year relationship with the Company, including member satisfaction or quality of service or results.” He also noted that there were no disputes with the big client.

How much will losing this customer hurt Progyny?

The major customer service agreement with Progyny will remain in effect through the remainder of 2024. Therefore, Progyny does not expect any adverse impact on its financial results for the current fiscal year.

However, the client generated 12% of Progyny’s revenue in the six months ended June 30 and 13% in the 12 months ended December 31, 2023. Progyny said the client represents an undisclosed smaller percentage of its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).

The company will certainly feel some effects of the loss next year. However, Progyny said it continues to project total membership growth in both 2024 and 2025.

Is Progyny stock a good pick to buy on the dip?

Some brave investors might be interested in picking up shares of Progyny after its latest bad news. However, I think the prudent thing to do is to stay on the sidelines until the company’s growth prospects are clearer.