On Thursday, Jefferies, a global investment banking firm, initiated coverage on Biote Corp. (NASDAQ:BTMD), a hormone optimization provider, with a Buy rating and a price target of $6.55. The company, which generates revenue through pellet procedures, has a significant potential market of 55 million but currently has low brand awareness, with approximately 400,000 patients and around 7,000 practitioners.
Biote is expected to see a Compound Annual Growth Rate (CAGR) of 16% in revenue through fiscal year 2027, according to Jefferies. This growth projection is based on increased brand awareness, expansion into wellness sectors such as compounded GLP-1, and the aging U.S. population. The firm's franchise-like business model, which generates 80% of its revenue from procedures, is noted for its scalability and low capital requirements.
Despite the positive outlook, Jefferies also acknowledges certain challenges facing Biote. The high cost of procedures, which are paid for entirely in cash by patients, and the lack of support from professional organizations such as the North American Menopause Society (NAMS) and the American College of Obstetricians and Gynecologists (ACOG) are considered potential headwinds for the company.
In terms of financial forecasts, Jefferies models a 15% three-year sales CAGR for Biote and anticipates the company will achieve a gross margin of 69.5% by fiscal year 2025. The company's business model and growth strategies position it to potentially capitalize on the expanding market for hormone optimization therapies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.