Shares of Evolus popped Thursday after the medical aesthetics company notched its first-ever quarterly profit.
Analysts didn't expect Evolus to hit profitability until the fourth quarter, according to FactSet. But the company's strong 36% revenue growth fueled $1.1 million in adjusted operating income, Chief Executive David Moatazedi told Investor's Business Daily. Analysts projected a $2.6 million loss.
Evolus, which markets itself as a beauty company as opposed to a pharmaceutical company, ranks third in the neurotoxin market, behind AbbVie and Galderma. Neurotoxins — the most famous of which is AbbVie's Botox — freeze the muscles, preventing them from causing deeper wrinkles over time. Evolus makes Jeuveau.
Moatazedi says Evolus is outpacing the U.S. medical aesthetics market, which is growing 6%-9% each year. The key to this growth is how Jeuveau is different from its competitors. Jeuveau is scientifically identical to Botox, he says, but uses a different purification process. It's gaining steam among millennials.
"This category is being viewed, especially in this younger generation, as part of their beauty regimen," he told IBD. "There's a lot of science that supports if you start neurotoxins earlier, you prevent the wrinkling, and not wrinkling then prevents the aging process."
Evolus stock jumped 13% to 14.04 on Thursday. Shares are forming a double-bottom base with a buy point at 15.43, according to MarketSurge.
Evolus Sales Soar 36%
During the June quarter, Evolus' sales soared 36% to $66.9 million. That narrowly topped analysts' call for $64.9 million in sales.
In response, the company raised its outlook for the year and now expects $260 million to $270 million in sales. The midpoint of Evolus' outlook is just ahead of analysts' forecast.
The popularity of medical spas is helping grow the Jeuveau brand. Customers can book neurotoxin shots as easily as they can make an appointment for their hair or nails. Each session costs roughly $300 to $500 out of pocket, and customers usually have neurotoxins injected three to four times a year.
Moatazedi estimates there are around 30,000 med spas, dermatologists and plastic surgeons who give neurotoxin injections in the U.S. — almost double the number of Starbucks coffee shops. Jeuveau is available in 14,000 clinics across the country and has about 30% share of those clinics. But Evolus is adding about 700 new clinics every quarter.
"As we look at this year, we expect to be the No. 1 brand in terms of dollar growth despite being the No. 3 player," Moatazedi told Investor's Business Daily.
Expanding Into Fillers
Notably, Evolus isn't stopping at neurotoxins. The company asked the Food and Drug Administration to clear its fillers, Evolysse lift and smooth fillers. Moatazedi says the medical aesthetics player hopes to launch those in 2025.
Fillers help lessen the appearance of fine lines and, literally, fill skin tissue that has lost hyaluronic acid and collagen over time. While other fillers are heated multiple times in the manufacturing process, the Evolus fillers are actually frozen. This helps preserve more of the hyaluronic acid, he said.
If cleared, Evolus will expand its offerings in the 14,000 clinics where Jeuveau is already offered.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
