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On Wednesday, BofA Securities maintained its Underperform rating on Hims and Hers (NYSE:HIMS) with a steadfast $21.00 price target. According to InvestingPro data, the company currently trades at a P/E ratio of 69x and has demonstrated remarkable revenue growth of 69% over the last twelve months. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its Fair Value. The firm’s analysis focused on the increased competition and uncertainty in the direct-to-consumer (DTC) channel for the company, especially following recent developments with Novo Nordisk (NYSE:NVO). Semaglutide, a drug used in weight management, has been removed from the drug shortage list, which directly impacts Hims and Hers’ market dynamics.
BofA Securities estimates that Hims and Hers will generate over $200 million in revenue from GLP-1 products in the first quarter of 2025. The firm also assumes that personalized GLP-1 treatments will contribute significantly to the expected $725 million in weight loss revenue for the year. This growth projection aligns with the company’s strong financial trajectory, as InvestingPro analysis reveals a projected 58% revenue growth for FY2025. Discover 13 additional exclusive InvestingPro Tips and comprehensive valuation metrics with an InvestingPro subscription. Despite these projections, the firm believes that the current stock price of Hims and Hers already factors in the anticipated growth from personalized semaglutide beyond the first quarter.
The firm anticipates potential challenges due to litigation and increased scrutiny on personalized GLP-1 compounding after the expiration of the 503A/503B grace periods in April and May. BofA Securities suggests that these factors, combined with the competitive landscape, could limit Hims and Hers’ ability to surpass their 2025 revenue guidance.
In summary, BofA Securities has expressed caution regarding Hims and Hers’ near-term growth prospects, citing the end of the drug shortage for semaglutide and the entrance of new competitors in the market. The firm has reiterated its Underperform rating and maintains a $21 price target on the company’s stock, signaling skepticism about the company’s ability to continue its previous growth trajectory. Despite these concerns, InvestingPro data shows the company maintains a healthy financial position with a current ratio of 1.79 and minimal debt levels. For deeper insights into HIMS’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Hims & Hers Health, Inc. has been navigating significant developments in the competitive landscape of the pharmaceutical industry. The company recently faced competitive pressure from Novo Nordisk’s launch of NovoCare Pharmacy, which offers FDA-approved Wegovy (semaglutide) at a reduced monthly cost, potentially impacting Hims & Hers’ market share. Despite this, Hims & Hers plans to continue compounding semaglutide, leveraging a personalization exemption, amidst regulatory changes affecting compounding pharmacies. Analysts have responded with varied outlooks; Citi maintains a Sell rating with a $27 price target, while Truist Securities increased its price target to $39, maintaining a Hold rating. TD Cowen expressed confidence with a Buy rating and raised its price target to $44, citing the company’s growth potential despite challenges with GLP-1 drug availability. Piper Sandler also adjusted its price target to $35, holding a Neutral stance due to uncertainties anticipated for 2025, despite acknowledging strong recent performance. These developments highlight the dynamic environment Hims & Hers is operating in, with analysts weighing both opportunities and risks.
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