Monash IVF demand set to grow with older mums

More Aussie women are choosing to have babies later in life, driving future demand and growth for the fertility services provider, analysts say.

Australia’s social trend towards more women having children later is likely to see fertility services provider Monash IVF Group continue to grow cycles and market share over the medium-longer term, analysts at Macquarie predict.

Macquarie’s note to clients on Thursday included research data showing the median age of women having children had increased by about 2 years since 2000, while 25 per cent of births are to women over 35 years.

According to the Australia and New Zealand Assisted Reproduction Database (ANZARD), over 27 per cent of IVF services in 2019 were undertaken by women over the age of 40, 37 per cent of treatment being in women aged 35-39.

In Australia, nearly 74,700 women were aged 35 or over when they gave birth in 2019, up from the 41,400 in 1999, according to the Australian Institute of Health and Welfare.

Women aged over 40 are more likely to require several IVF cycles to have a successful pregnancy.

“IVF utilisation has continued to shift to older age brackets, with about 65 per cent of IVF performed on women aged 35+. More cycles are required as age increases,” analysts at Macquarie said.

“MVF is well placed to gain share, both organically and inorganically. We see valuation appeal at current levels.”

The $360m business is rated outperform at a price target of $1.30 at Macquarie.

Older mums means there is a strong chance fertility service providers are likely to be in big demand.

While IVF providers, including Monash have benefited from significant demand during the pandemic baby boom (2020-2021), there are “several long-term tailwinds” that will provide support for further growth, analysts said.

These include a decline in natural rate of conception with age increases, increased social egg freezing as women delay having children, increased use and funding of genetic testing and awareness with increased utilisation.

Some of the reasons for women having kids later in life may include an increase in pursing higher education, greater participation in the workforce and late marriages.

“We expect MVF to gain domestic market share over FY23, both from organic expansion and inorganic acquisition,” Macquarie’s note said.

Assumptions underpinning the valuation and forecasts include a 105 basis points increase in Monash’s market share in the first half of 2023 for domestic fresh cycles due to greater contribution from acquisitions.

“Overall, we expect this to drive domestic revenue growth of +11.5 per cent in FY23.”

The key risk to its valuation and recommendation are lower-than-expected domestic IVF cycles impacted by “increasing cost of living pressures”, or lower-than-expected market share gains.

Shares in Monash IVF Group are up 3.5 per cent to 96c in noon (AEDT) trading.