šŸ“®The Sunday Newsletter archive

Pandemic Or Not, The Beauty Business Thrives

If you’re looking to invest in an industry that will always be relevant, look no further than the beauty industry. It’s human nature to want to be attractive, and this desire is now stronger than ever due to social media (you know, the perfect selfiešŸ¤³).Ā AirSculpt Technologies (AIRS) is a company that’s capitalizing on that increasing demand.Ā Ā 

It runs a network of spa-like centers (Elite Body Sculpture)Ā that provide noninvasive medical aesthetic procedures for body contouring. It has developed a proprietary “AirSculpt” methodĀ that removes unwanted fat in a minimally invasive procedure. It’s a gentler alternative to traditional fat removal procedures.

The company’s growth has been phenomenal. You would assume that amid the pandemic the demand for body contouring services would fall, but actually, the opposite has been true. In 2020 its revenue jumped 52% to $62.3 million and reported a net income of $5.7 million. In the first half of 2021, revenue growth accelerated sharply to 177% y/y, reporting a net income of $12.7 million and operating cash flows of $23.8 million.Ā 

šŸ“«Originally posted as part of the Sunday Newsletter
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AirSculp’s financials are impressive indicating strong demand for its services and excellent business executions. In fact, the company says that the demand is so strong that its US centers attract a lot of international customers. One of the reasons it’s going public is to expand internationally, in affluent metropolitan regions.Ā 

The company has significant expansion opportunities ahead as the market forĀ body fat reduction and body contouring procedures is large and expanding. It was an estimatedĀ $9.8 billion in 2020 and is projected to grow 10.4% on average between 2020 and 2026.

AirSculpt has priced its IPO at a midpoint price ofĀ $16 per share, valuing the company at $885 million. At this price, its P/S ratio will beĀ 8.70, a very reasonable multiple given its impressive growth and already profitable operations. Shares start trading on Friday.

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