According to BTIG, Progyny will be a big beneficiary as more Americans try fertility treatment to grow their families. The Wall Street firm initiated a buy rating on the stock on Monday, noting that the fertility benefits management company is “delivering the joy of parenthood” with its stellar results. Its $50 price target implies an upside of 34.7% from Friday’s close. Progyny works with companies to provide employees with maternity and family building benefits. It has a network of fertility specialists, a pharmacy and what it calls Smart Cycle, which bundles personal services, tests and treatments. The company had a market capitalization of $1.3 billion when it went public in 2019 and is currently valued at $3.7 billion. “As the prevalence of infertility increases and more patients seek additional support, this may be a financially constraining prospect,” analyst David Larson wrote in a note to clients. And emotionally taxing process, the fertility space is growing fast.” PGNY mountain 2019-10-25 Progyny’s performance since IPO in October 2019 Progyny’s total addressable market is $8 billion, according to the Centers for Disease Control and Prevention. calculated from the data, Larsen said. However, this figure does not take into account those who are not actively seeking infertility treatment. BTIG estimates that numbers could double if reach and accessibility increase. This lucrative addressable market remains largely unpenetrated, Larsen said. “We also like PGNY’s high revenue growth, strong profit growth and near-perfect retention of existing clients. The company is led by a management team with extensive experience in healthcare research and payments,” he added. Not only is the prevalence of infertility increasing, but workers are pushing their employers to offer or expand fertility benefits, Larsen noted. Traditional insurance coverage is limited, but treatment is expensive. According to the American Society for Reproductive Medicine, the average price of an in vitro fertilization (IVF) cycle is $12,400. Drugs can add another $3,500 to $7,000 to the bill. “In a tight labor market, companies are increasingly looking to partner with Progyny so they can attract and retain high-quality talent,” Larson said. “PGNY also tends to reduce fertility and health care costs for employers because PGNY’s narrow network of specialists and patient care advocates know how to safely pass ART (assisted reproductive technology) cycles, often preventing multiple births, which can lead to high-complication diseases and expensive NICU (Neonatal Intensive Care Unit) stays.” He said the company is mainly relying on organic growth but also has untapped opportunities for strategic expansion and potential acquisitions. “PGNY will likely continue to enhance its fertility offerings. PGNY can spend resources acquiring companies with capabilities that enhance or integrate well with itself. There are a number of smaller, fast-growing companies entering the space for more fertility-related niches field,” Larson wrote. —CNBC’s Michael Bloom contributed reporting.