Beauty Health Co. vs. Nu Skin: Which Stock is a Better Buy?

: SKIN | Beauty Health Co. News, Ratings, and Charts

SKIN – People have become more wellness-conscious nowadays, spending significantly on skincare and products for their overall well-being. Driven by unprecedented demand, the skincare industry is expected to keep growing. This should bode well for beauty stocks such as Beauty Health (SKIN) and Nu Skin Enterprises (NUS). But which of these stocks is a better choice now? Read more to find out.

Beauty Health Co. (SKIN) designs, develops, manufactures, markets, and sells aesthetic technologies and products worldwide. The company also provides a range of skin-enhancing systems. On the other hand, Nu Skin Enterprises, Inc. (NUS) develops and distributes personal care and wellness products worldwide. It also provides customized skin care systems.

People are now more wellness-conscious than ever before, developing personal health and skincare rituals to stay fit. Skincare products are gaining popularity worldwide, driven by changing lifestyles. Thanks to social media platforms, people are now more aware of the various brands and their products and trends. Several new skincare brands are recently popping up, offering natural and organic products to soothe the demand for chemical-free alternatives. The global skincare market is projected to reach $145.82 billion in 2028, growing at a CAGR of 5.52% in 2021-2028. Both SKIN and NUS are well-positioned to benefit from the growing market.

SKIN has gained 44.1% over the past three months, while NUS has slumped 27.8%. Also, NUS’ 18.6% slump year-to-date compares with SKIN’s 5.3% decline. But which stock is a better buy now? Let’s find out.

Latest Developments

On September 21, SKIN announced its collaboration with Epicutis, a new professional, medical-grade luxury skincare line that treats skin health with science-backed ingredients. The company expects this partnership to expand its portfolio of customized treatment solutions.

In August, NUS showcased its range of at-home beauty devices. The popularity of home-use beauty devices has skyrocketed over the past year as people were compelled to stay at home, providing a broader market for NUS products. Given the brand’s popularity worldwide, NUS is expected to grow further with prominent product launches and technological advancements.

Recent Financial Results

SKIN’s net sales increased 371.2% year-over-year to $66.51 million in the fiscal second quarter that ended June 30. Gross profit stood at $47.25 million, up 1,005% from the same period last year. However, its net loss grew 1,240.6% from the year-ago loss to $139.38 million. The company’s net loss per share increased 406.7% year-over-year to $1.52.

For the second quarter that ended June 30, NUS’ revenue increased 15% year-over-year to $704.06 million. Its gross profit grew 16.1% from its year-ago value to $532.08 million, while its net income improved 41.8% from the same period last year to $59.34 million. The company’s EPS improved 42% year-over-year to $1.15.

Expected Financial Performance

Analysts expect SKIN’s revenue to increase 27.7% in the next year. The company’s EPS is expected to grow 122% in the next year.

On the other hand, Street expects NUS’ revenue to increase 7.5% in the current year and 2.3% in the next year. The company’s EPS is expected to grow 15.7% in the current year and 7.1% in the following year. Moreover, NUS’ EPS is expected to grow 6.8% per annum over the next five years.

Profitability

NUS is more profitable with a gross profit margin and EBITDA margin of 74.56% and 13.62%, compared to SKIN’s 65.95% and negative 6.82%, respectively.

Furthermore, NUS’ ROTC and net income margin of 13.62% and 8.35% compare with SKIN’s negative 5.73% and 81.70%, respectively.

Thus, NUS is more profitable here.

Valuation

In terms of forward EV/Sales, SKIN is currently trading at 14.07x, 94% higher than NUS, which is currently trading at 0.84x. Also, SKIN’s forward EV/EBITDA ratio of 134.07 is 95.8% higher than NUS’s 5.65.

Thus, NUS is relatively affordable here.

POWR Ratings

NUS has an overall grade of B, which equates to a Buy rating in our proprietary POWR Ratings system. On the other hand, SKIN has an overall grade of D, which translates to a Sell rating. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

NUS has a grade of A for Value. NUS’ non-GAAP forward P/E ratio of 9.54 is 49.3% lower than the industry average of 18.80. On the other hand, SKIN has a grade of D for Value. This is justified as SKIN’s non-GAAP forward P/E ratio of 421.28 is 2,141.3% higher than the industry average.

Of the 13 stocks in the Medical – Consumer Goods industry, NUS is ranked #7. Alternatively, among the 71 stocks in the Consumer Goods industry, SKIN is ranked #61.

Beyond what we’ve stated above, we have also rated the stocks for Quality, Sentiment, Momentum, and Growth. Click here to view all of NUS’ ratings. Also, get all of SKIN’s ratings here.

Click here to checkout our Healthcare Sector Report for 2021

The Winner

The beauty industry is expected to benefit from the growing demand for skincare products. Both SKIN and NUS are expected to benefit from the industry tailwinds. However, with a lower valuation and higher profitability, NUS is a better buy here.

Our research shows that odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all top-rated stocks in the Medical – Consumer Goods industry here. Also, click here to view the top-rated stocks in the Consumer Goods industry.


SKIN shares were trading at $26.89 per share on Thursday afternoon, up $0.73 (+2.79%). Year-to-date, SKIN has gained 137.75%, versus a 18.90% rise in the benchmark S&P 500 index during the same period.


About the Author: Subhasree Kar


Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
SKINGet RatingGet RatingGet Rating
NUSGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Recession or Not Recession…That Is the Question

Every investor appreciates that recessions and bear markets go hand in hand. But the definition of a recession often seems more difficult to pin down. So are we in a recession? And if not, then does that mean that disaster has been averted or that the pain train is still rolling towards investors? This is an important debate because it helps us appreciate what lies ahead for the stock market (SPY). We will tackle this vital topic in this week's commentary. Read on below...

:  |  News, Ratings, and Charts

3 Active Stocks on Wall Street to Buy Right Now

Even though the U.S. stocks ended July with decent gains, growing recession fears could keep the stock market under pressure in the near term. However, despite the current market headwinds, it could be wise to invest in fundamentally sound stocks, Microsoft (MSFT), SIGA Technologies (SIGA), and Fortinet (FTNT), which have been active on Wall Street lately. Read on to learn more…

:  |  News, Ratings, and Charts

4 Big Reasons Why the Bear Rally Is Nearing an End…

The Stock Market (SPY) has put on an impressive rally over the last few weeks, leading many investors to believe that the bull is ready to resume its run. However, there are multiple reasons to believe the bear market is far from over. I lay out 4 of the main reasons below and explain how you can profit from the volatile markets that lie ahead. Read on below for more…

:  |  News, Ratings, and Charts

2 Winning Stocks to Pay Attention to This Week

Concerns over soaring inflation, the Fed’s aggressive interest rate hikes, the decline in GDP for two consecutive quarters, and a potential recession are expected to keep the stock market under pressure in the near term. Fundamentally sound and winning stocks Murphy USA (MUSA) and JAKKS Pacific (JAKK) could be good additions to your watchlist as investors prepare for a busy week of inflation data. Let’s discuss…

:  |  News, Ratings, and Charts

4 Big Reasons Why the Bear Rally Is Nearing an End…

The Stock Market (SPY) has put on an impressive rally over the last few weeks, leading many investors to believe that the bull is ready to resume its run. However, there are multiple reasons to believe the bear market is far from over. I lay out 4 of the main reasons below and explain how you can profit from the volatile markets that lie ahead. Read on below for more…

Read More Stories

More Beauty Health Co. (SKIN) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All SKIN News