Jefferies cuts Biote stock price target to $6.80, maintains buy

On Friday, Jefferies analyst Kaumil Gajrawala revised the price target for Biote Corp. (NASDAQ:BTMD) to $6.80 from the previous $9.24, while sustaining a Buy rating on the stock. Currently trading at $3.83, BTMD has experienced a significant decline, falling nearly 28% in the past week and 50% year-to-date. The adjustment follows Biote’s fourth-quarter performance, which saw both sales and EBITDA fall short of expectations, resulting in a full-year outcome at the lower end of the projected range. According to InvestingPro data, the company maintains strong fundamentals with a 70.5% gross profit margin and healthy cash flows.

Gajrawala noted that the company’s guidance for 2025, which anticipates a 2-5% revenue growth, is significantly below earlier expectations. He pointed out that the introduction of new software has impeded the growth of new practitioners, which is a critical factor for the company’s business model that operates on a recurring revenue basis. InvestingPro analysis indicates the stock is currently in oversold territory, with multiple technical indicators suggesting a potential reversal opportunity. Subscribers can access 12 additional ProTips and comprehensive valuation metrics for BTMD.

Despite a weaker first quarter forecast and an expected gradual recovery, Gajrawala remains optimistic about Biote’s future. He emphasized that growth should return as the impact of the software rollout subsides. The analyst highlighted that Biote had a strong foundation going into the software transition, with approximately 1,500 new practitioners added in fiscal year 2024, marking a 20% increase. The company’s financial health score is rated as "GOOD" by InvestingPro, supported by strong cash flow metrics and a solid current ratio of 1.32.

In his commentary, Gajrawala stated, "Q4 wasn’t great. Sales and EBITDA missed putting the full-year at the low end of the range. 2025 guidance of 2-5% rev growth is also much lower than expected. The software rollout has weighed on new practitioner growth — a key driver in an annuity-like business. Q1 will be light, and the ramp will take time, but growth should return. Additions were solid heading into the rollout (~1500 added in F24, +20%). We remain positive. Growth is rarely linear. Reit Buy."

The analyst’s stance reflects a belief in the company’s capacity to overcome the current challenges and return to a growth trajectory. Despite the reduced price target and near-term headwinds, the maintained Buy rating indicates confidence in the long-term prospects of Biote Corp. With an EV/EBITDA ratio of 4.85 and strong free cash flow yield, detailed valuation analysis and additional insights are available in the comprehensive Pro Research Report, exclusively available to InvestingPro subscribers.

In other recent news, BioTE Corp reported its fourth-quarter 2024 earnings, which showed a slight miss on earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.10, falling short of the $0.11 forecast, and revenue came in at $49.8 million, below the expected $51.29 million. Despite this, BioTE demonstrated a year-over-year revenue growth of 9%, driven by increases in procedure and dietary supplement revenues. Additionally, the company launched the BioTRx wellness platform and expanded its manufacturing capabilities, setting its 2025 revenue guidance between $200 million and $280 million.

In a separate development, Truist Securities adjusted its outlook on BioTE, reducing the price target from $9.00 to $7.00 while maintaining a Buy rating. This adjustment comes amid operational challenges related to the implementation of new software, which affected revenue growth. However, Truist Securities expressed confidence in BioTE’s potential, citing robust demand in the Bioidentical Hormone Replacement Therapy market and the recent appointment of a new CEO with a strong healthcare background as positive factors. The firm believes the software-related issues are temporary and that BioTE is well-positioned to resolve them.

BioTE’s gross profit margin improved to 71.8%, reflecting cost savings and effective cost management. The company also set its adjusted EBITDA forecast for 2025 between $59 million and $64 million. Despite the earnings miss, BioTE continues to focus on growth, with plans to expand the BioTRx platform and increase practitioner acquisition.

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