IPO stock Hinge Health topped its first buy point Monday before fading. The physical therapy innovator is today's IBD Stock of the Day.
Hinge Health is a telehealth option for physical therapy, with a platform that automates treatment plans and an app for patients. The company uses artificial intelligence to create and adjust treatment programs. It also uses teams of physical therapists, physicians and health coaches.
Most of its patients have problems with their musculoskeletal system: muscles, bones, joints and connective tissues. The company contracts with employers who offer Hinge's services as a benefit to employees and as a way to reduce treatment costs. Hinge's prospectus says its services save an estimated $2,387 per member on average over a 12-month period.
At the start of the year, Hinge Health was treating more than 532,000 people through more than 2,250 clients, according to the prospectus. That's an increase in patients of 43% from the year-earlier period and a 36% rise in client companies. The company has contracts with about half of the Fortune 100, and boasts a 98% overall retention rate.
Hinge also has partnerships with the five largest national health plans.
Revenue increased 33% to $390.4 million in 2024. For the quarter ended in March, revenue climbed 50% to $123.8 million. Gross margin last year was 77%, up from 66% in 2023. Hinge Health lost money in 2023 and 2024, but analysts polled by FactSet expect the company to earn 51 cents a share this year.
Analysts Bullish On IPO Stock
Hinge Health has expanded from its primary market of self-insured employers, and it cautions that costs will rise to continue its growth strategy.
Last week, about 10 analysts gave their initial ratings on Hinge Health. All were buy, outperform or overweight, according to Dow Jones Newswires. Price targets ranged from 41 to 52. The stock traded around 42 Monday afternoon.
Despite losses the past couple of years, the stock has an IBD Composite Rating of 90, according to IBD Stock Checkup. That's seventh highest in the medical products industry group, which has more than 120 companies.
Hinge Health went public in a May 22 IPO at an initial offering price of 32 — at the top end of the expected range. Morgan Stanley, Barclays and BofA Securities led the initial public offering.
Shares Brush Buy Point
In three days, shares climbed to 43.80 then began forming a quick, three-week consolidation. The 24%-deep price decline formed an IPO base with a 43.80 buy point.
The stock jumped past that level Monday morning, then faded back below it in afternoon trading. Investors should wait until the stock climbs above the buy point before considering a purchase of shares.
