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Hinge Health (HNGE) shares recently closed at US$43.76, with the stock showing a 1 day gain of 0.99% but declines over the past week, month, and past 3 months.
See our latest analysis for Hinge Health.
Looking beyond the latest 1 day share price return, Hinge Health’s share price return is lower over the past week, month, 3 months and year to date. This points to fading momentum despite the recent uptick and suggests the market has been reassessing its growth potential and risk profile.
If digital MSK care is on your radar, this could be a good moment to scan the broader space of healthcare stocks for other healthcare names catching market attention.
With Hinge Health posting annual revenue of US$534.39 million, a loss of US$429.07 million and trading below some analyst price targets, you have to ask: is the market overlooking its potential or already pricing in future growth?
On a P/S of 6.4x at a last close of US$43.76, Hinge Health screens as expensive relative to both its industry and an estimated fair level, even though one comparison suggests it is on the cheaper side versus direct peers.
The P/S multiple links what you pay today to each dollar of current revenue. It is often used for high growth or still unprofitable companies where earnings are not yet a clean signal. For Hinge Health, this lens is especially relevant because the company is loss making with a reported net loss of US$429.07 million against revenue of US$534.39 million.
Against its immediate peer group, Hinge Health is described as good value with a 6.4x P/S compared to a 7.4x peer average. This suggests the market is assigning a lower revenue multiple than similar names. At the same time, the same 6.4x multiple screens as expensive versus the broader US Healthcare industry average of 1.3x, and it sits above an estimated fair P/S ratio of 5.9x that our work suggests the market could gravitate toward over time.
Explore the SWS fair ratio for Hinge Health
Result: Price-to-Sales of 6.4x (OVERVALUED)
However, the current US$429.07 million annual loss and recent share price declines over 7, 30 and 90 days could quickly challenge any optimism around that P/S multiple.
Find out about the key risks to this Hinge Health narrative.
Here is the twist. While the 6.4x P/S ratio screens as expensive versus the wider US Healthcare sector and slightly above the 5.9x fair ratio, our DCF model points the other way, with Hinge Health trading at about 68.2% below an estimated fair value of US$137.78.
