Lake Street Capital Markets on Wednesday lowered its price target on LifeVantage Corporation (NASDAQ:LFVN) to $5.00 from $12.00 while leaving its Buy rating intact. The revised target implies upside from LifeVantage’s prevailing share price of $4.68, a level that reflects a 75.27% decline over the past 12 months.
The analyst move follows LifeVantage’s second-quarter financial report and an update to its guidance, both of which the firm described as weaker than anticipated. Management pointed to difficult year-over-year comparisons, tied in part to the strong sales trajectory last year after the MindBody GLP-1 product launch. Those comparisons contributed to meaningful pressure on reported results this quarter.
Despite the softer top-line performance, company-level profitability metrics remain robust. Data from InvestingPro cited by analysts show LifeVantage achieving gross profit margins of 78.75% and trading at a price-to-earnings ratio of 9.23. The firm also continues to record positive profitability over the trailing 12 months and currently yields 3.9% by InvestingPro’s measures.
LifeVantage recorded an inventory obsolescence charge related to its MindBody product, an accounting action the company said reflected a reset in demand that was lower than previously expected. Lake Street emphasized that the broader competitive backdrop in the weight loss market - specifically the wider availability and greater affordability of pharmaceutical GLP-1s - has negatively affected customer demand for the company’s offerings. The analyst noted that this dynamic is likely to persist and is reflected in the company’s revised guidance.
Lake Street’s decision to maintain a Buy rating, even as it cut the price target, reflects the firm’s assessment that recent market moves - including a 25% decline in after-hours trading following the results - have already priced in much of the downside associated with these headwinds. The analyst highlighted potential upside catalysts, namely the recent acquisition of the LoveBiome business and the prospect of incremental product introductions.
On the quarter, LifeVantage delivered mixed results. The company reported earnings per share of $0.15, meeting consensus EPS expectations. Revenue, however, came in at $48.9 million versus forecasts of $54.84 million, representing a shortfall relative to analyst projections and underscoring the top-line challenges referenced by management and Lake Street.
The market reaction after the release was characterized as cautiously optimistic by observers. The results and the subsequent guidance revision illustrate continuing adjustments in the company’s commercial and financial positioning. Investors will be watching management’s next steps to address the revenue gap and to assess how new product activity and the LoveBiome acquisition contribute to future performance.
Supplementary context
- Lake Street reduced its 12-month target on LFVN to $5.00 from $12.00 and retained a Buy rating.
- LifeVantage reported Q2 EPS of $0.15, matching expectations, but revenue of $48.9 million missed the $54.84 million forecast.
- The company took an inventory obsolescence charge on its MindBody product amid lower-than-expected demand and noted increased competition from pharmaceutical GLP-1s.
What this means for markets
The developments primarily affect the consumer health and wellness segment of the market, with secondary implications for healthcare exposure more broadly as GLP-1 availability shifts competitive dynamics. Equity investors in small-cap consumer and specialty-nutrition names may reinterpret valuation and growth assumptions in light of the company’s guidance revision and the inventory charge.