Stonegate Capital Partners Initiates Coverage on NU Skin Enterprises Inc. with Optimistic Outlook

Stonegate Capital Partners has recently initiated coverage on NU Skin Enterprises Inc. (NYSE: NUS), spotlighting the company's robust quarterly results and strategic initiatives aimed at fostering growth. NU Skin reported revenue, adjusted Net Income, and adjusted EPS of $386.1 million, $21.1 million, and $0.43, respectively, with revenue hitting the high end of its guidance range. Notably, the Rhyz Manufacturing segment experienced a 17% year-over-year revenue growth, and EPS significantly surpassed expectations.

The company's gross margin for the quarter stood at 68.8%, 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, signaling a strong position for the second quarter of 2025.

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, an AI-powered wellness assessment device, which 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 has seen impressive revenue growth in Latin America, up by 107%, although challenges remain in South Korea with a 22.8% growth. The company's digital-first model in Latin America is credited for this success, with expectations for continued growth.

Financially, NU Skin ended the quarter with $264.2 million in cash and a net cash position of $15.3 million, achieving a positive net cash position ahead of schedule. This financial health provides the company with flexibility as it pursues its strategic initiatives. Following a strong quarter, NU Skin has tightened its full-year 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, significantly 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. Stonegate Capital Partners' coverage initiation underscores NU Skin's potential for growth and operational efficiency, making it a noteworthy consideration for investors.