Wells Fargo Conceives a High Rating for the Fertility-Benefits Biz

Analysts at Wells Fargo deemed fertility benefits provider Progyny a strong buy, expressing that the market leader currently caters to just 5% of its potential market. Progyny offers family-focused services to approximately 7 million patients at over 600 companies, but the Wells Fargo analysts believe the market extends far beyond this, encompassing 156 million individuals.

The company generated nearly $1.3 billion in revenue during the previous fiscal year, marking a 10% increase, as it continued to broaden its services beyond the fundamental fertility realm.

Recently, the US fertility rate reached a record low, with women delaying pregnancy. The number of women who had given birth dropped by 20 percentage points from two decades ago to 2024, according to CDC data. As of 2024, roughly half of women under 30 had not yet given birth. However, this does not imply a decline in childbirth; rather, more women are delaying childbirth until later in life.

Consequently, the percentage of women giving birth in their 30s and 40s is on the rise, generating a burgeoning market of women more likely to require fertility services. Both Progyny and Carrot extend beyond basic fertility services, introducing additional revenue streams from the firms they already serve. For instance, Progyny Rx, launched in 2018, accounted for over a third of the company's revenue in the past fiscal year.

A proposed policy by President Trump could further expand the market, establishing a clear path for employers to offer standalone, supplementary fertility and IVF insurance. As the demand for fertility benefits grows, more companies might collaborate with third-party providers like Progyny to enhance their employee offerings. This information initially appeared on The Daily Upside, and readers can subscribe to the free The Daily Upside newsletter for expert analysis and insight on finance, economics, and markets.