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On Tuesday, BofA Securities maintained its Underperform rating on Hims & Hers Health, Inc. (NYSE:HIMS) shares, with a steady price target of $21.00. The firm’s analysis suggests skepticism regarding the company’s revenue growth forecasts, particularly concerning core revenue growth excluding GLP-1s and the anticipated transition from semaglutide to oral weight loss and liraglutide subscriptions in the latter half of the year. While InvestingPro data shows strong historical revenue growth of 56.7% in the last twelve months, with healthy financials including a current ratio of 2.14, indicating solid short-term liquidity.
BofA Securities highlighted that the January figures showed a slowdown in core revenue growth, excluding GLP-1s, to 31%, which falls significantly short of the company’s implied guidance for 2025 that estimates growth between 61-69%. The firm pointed out the challenges Hims & Hers faces, including the risk involved in successfully transitioning patients to new weight loss treatments and the increased competition from branded alternatives such as Wegovy and Zepbound, which are increasing production capacity.
Furthermore, BofA Securities anticipates that Hims & Hers’ competitors in the GLP-1 space may redirect their marketing budgets towards their traditional products, potentially increasing advertising costs for Hims & Hers’ legacy offerings. The firm expressed concern over the execution risk and the potential impact on the company’s ability to meet its revenue targets.
The report also mentioned a downward adjustment in the target multiple for Hims & Hers, from approximately 19 times to approximately 17 times, citing the lack of clarity regarding the company’s core and weight loss product growth through 2025. BofA Securities concluded that they do not foresee an upside to the 2025 revenue guidance and believe that the potential for a "beat and raise" narrative for the company’s stock is limited in the near term.
In other recent news, Hims and Hers Health, Inc. reported its fourth-quarter 2024 earnings, revealing revenue of $481 million, which exceeded expectations of $469.33 million and marked a 95% increase year-over-year. However, the company reported an EPS of $0.11, falling short of the forecasted $0.17. Despite the revenue beat, the stock experienced a significant drop, reflecting investor concerns over the earnings miss. BTIG reaffirmed its Buy rating on Hims and Hers, maintaining a price target of $85.00 after the impressive revenue results. The company provided optimistic guidance for 2025, projecting revenues between $2.3 billion and $2.4 billion, surpassing previous estimates.
Citi adjusted its price target for Hims & Hers shares to $27.00, up from $25.00, while maintaining a Sell rating. The adjustment follows the company’s earnings call, which highlighted the sustainability of its weight loss offerings. Citi expressed skepticism about the company’s revenue guidance, which anticipates significant growth driven by weight loss products. The weight loss segment, particularly the GLP-1 offerings, contributed over $225 million to the company’s revenue, accounting for 15% of the total. Despite these developments, Citi remains cautious, seeking more favorable entry points and additional growth details beyond GLP-1s before revising its rating.
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