Shares of Hinge Health continued their upward momentum in Thursday's premarket session, rising 0.4% to $38.90. This follows a substantial 17.3% surge in the previous trading day, driven by the company's promising financial projections.
Strong Quarterly Performance and Forward Guidance
The digital musculoskeletal care provider reported a 46% year-over-year increase in fourth-quarter revenue, reaching $170.7 million. Adjusted diluted earnings per share came in at $0.49. For the full year 2026, management forecasts revenue between $732 million and $742 million.
CEO Daniel Perez characterized the period as "an exceptional quarter," highlighting improved client win rates and growth in eligible patient lives. The company anticipates first-quarter revenue of $171 million to $173 million, with an adjusted operating margin of approximately 18% at the midpoint.
Analyst Action and Valuation
RBC Capital Markets responded to the earnings report by maintaining its Outperform rating on the stock. However, the firm reduced its price target to $50 from $60, citing the company's improved profitability metrics and current valuation. Analysts noted the stock trades at roughly three times their estimated 2027 revenue, with a "long runway ahead" for market expansion.
Despite the positive adjusted profitability, investors noted a significant GAAP operating loss for 2025. This divergence between GAAP and non-GAAP results presents a key focus area for the market, especially for a stock that has experienced volatility since its initial public offering in May.
The company provides digital solutions for musculoskeletal conditions to employers and health plans, aiming to reduce overall medical costs through software and remote clinical care. Investors await the annual Form 10-K filing, expected in the coming weeks, with the next earnings update scheduled for May 7.