Crispr Therapeutics shares tumble after significant earnings miss
Investing.com - Citi upgraded So-Young Int’l (NASDAQ:SY) from Neutral to Buy and raised its price target to $5.50 from $0.80, citing the company’s rapid clinic expansion and strong execution. The stock has shown remarkable momentum, delivering a 432.8% return year-to-date and currently trading near its 52-week high of $4.39.
The upgrade follows So-Young’s quick expansion of its clinic network since launching in November 2024, with 31 centers now operating in major Chinese cities including Beijing, Shanghai, and Shenzhen as of the end of June. According to InvestingPro data, the company maintains a healthy financial position with more cash than debt and a strong current ratio of 2.75x.
Citi highlighted So-Young’s strengths in differentiating its brand position for quality standardized service, increasing pricing power over procurement as it scales up, effective online cross-selling, and proven execution in store management with approximately 80% of aesthetic centers generating positive operating cash flow in the first quarter. While the company maintains a solid gross profit margin of 58.4%, InvestingPro analysis indicates it’s currently trading above its Fair Value. Discover 13 additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
The investment bank identified several potential catalysts that could drive the stock price higher, including improving monthly sales for flagship stores in June, potential exploration of a full-managed franchising model by the end of 2025, and a solid exclusive product pipeline through 2027.
Citi has opened a 90-day positive catalyst watch on So-Young, anticipating a potential second-quarter earnings beat, and derived its new target price using a sum-of-the-parts valuation that recognizes the company’s "unique omni-channel advantage for light medical aesthetic services."
In other recent news, So-Young International reported a decline in first-quarter revenue, accompanied by widening losses. The company announced revenue of RMB297.3 million ($41.0 million) for the first quarter of 2025, marking a 6.6% decrease compared to the previous year. This decline was at the high end of its prior guidance range. The non-GAAP net loss attributable to So-Young expanded to RMB31.5 million ($4.3 million), a significant shift from a non-GAAP net income of RMB4.1 million in the first quarter of 2024. While the company’s aesthetic treatment services revenue surged 551.4% year-over-year to RMB98.8 million, this growth was countered by a 34.1% drop in information and reservation services revenue, which fell to RMB142.9 million. Co-Founder and CEO Xing Jin highlighted the strong growth momentum of their branded aesthetic centers, which achieved triple-digit revenue growth. Looking ahead, So-Young anticipates its aesthetic treatment services revenue for the second quarter of 2025 to be between RMB120.0 million and RMB140.0 million, indicating a potential growth of 337.3% to 410.1% year-over-year.
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