Stonegate Capital Partners has initiated coverage on NU Skin Enterprises Inc. (NYSE: NUS), spotlighting the company's robust financial results and promising strategic initiatives. NU Skin reported revenue, adjusted Net Income, and adjusted EPS of $386.1 million, $21.1 million, and $0.43, respectively, with revenue at the high end of the guidance range. The Rhyz Manufacturing segment notably achieved a 17% year-over-year revenue growth, and EPS significantly outpaced guidance.
The company's gross margin stood at 68.8% for the quarter, marking a quarter-over-quarter expansion of 106 basis points from the first quarter of 2025. This performance is attributed to NU Skin's focus on revenue growth and operational optimization, leading to a remarkable 103.5% year-over-year growth in adjusted Net Income. Stonegate Capital Partners expressed encouragement over the continued net income margin expansion as NU Skin gears up for a solid second quarter.
NU Skin is advancing two strategic initiatives expected to drive growth in the near to medium term. The expansion into India is on schedule, with pre-opening activities set for the fourth quarter of 2025 and a full launch anticipated by mid-2026. Additionally, the company is preparing to launch the Prysm iO wellness device, an AI-powered wellness assessment tool that promises to revolutionize personalized product recommendations through a proprietary subscription service.
Despite a year-over-year decline in sales leaders, paid affiliates, and customers, NU Skin witnessed strong revenue growth in Latin America at 107%, contrasted with challenges in South Korea at 22.8%. The company's scalable digital-first model in Latin America is credited for this growth, with expectations for continued success.
NU Skin concluded the quarter with a strong balance sheet, featuring $264.2 million in cash on hand and a net cash level of $15.3 million. This financial health positions the company favorably as it pursues its strategic initiatives. Following a strong quarter, NU Skin has tightened its fiscal year 2025 revenue guidance to $1.48 billion to $1.55 billion and raised its adjusted EPS guidance to $1.15 to $1.35.
Stonegate Capital Partners values NU Skin using a Price to Adjusted EPS comparison, noting the company's current trading at a forward Price to Adjusted EPS of 5.2x, below the average comps at 16.9x. Applying a valuation range of 7.0x to 11.0x, Stonegate estimates a per share valuation range of $10.95 to $17.21, with a midpoint of $14.08.
For more information on NU Skin Enterprises Inc., visit https://www.nuskin.com.
