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On Tuesday, BofA Securities analyst Michael Cherny increased the price target on Hims & Hers Health, Inc. (NYSE:HIMS) to $22.00, up from the previous $21.00, while maintaining an Underperform rating on the company’s shares. The adjustment follows an analysis of sales data provided by Bloomberg Second Measure (BSM), which indicated that the company’s GLP-1 sales growth is accelerating, potentially leading to a near-term upside to Street estimates.
The BSM data showed a year-over-year sales growth of 124% in February, or 132% when excluding the impact of the leap day from the previous year. GLP-1 products accounted for approximately 45% of the company’s gross online sales. Based on sales trends from January and February, Cherny estimates that Hims & Hers’ online revenue for the first quarter of 2025 could range between $594 million and $622 million. This forecast represents a year-over-year growth of 122% to 132%, which exceeds the Visible Alpha consensus of $523.9 million.
Despite this growth, the company’s guidance anticipates a year-over-year growth of 43% to 52% excluding weight loss products for the fiscal year 2025. This suggests an acceleration in the core business. However, the BSM data also points to a deceleration in core growth, with the first quarter potentially seeing a 30% increase compared to 39% in the fourth quarter and 47-50% in the third quarter of the previous year. For deeper insights into HIMS’s growth trajectory and valuation metrics, InvestingPro subscribers can access over 16 additional ProTips and comprehensive financial analysis in the Pro Research Report.
Cherny highlighted that the slowing core growth rate is a significant factor to consider, especially given that semaglutide, a key component for weight management, could be removed from the company’s sales model at any time. Currently, semaglutide represents nearly half of Hims & Hers’ sales. The analyst emphasized the execution risk this poses to the company’s top-line performance, which has historically been characterized by consistently exceeding expectations and raising forecasts since its initial public offering.
The revised price target of $22 is still based on a 17 times multiple of the company’s projected CY25E EV/EBITDA, which has been slightly increased in Cherny’s estimates.
In other recent news, Hims & Hers Health, Inc. has been the subject of several notable developments. BofA Securities raised its price target for the company to $22, reflecting significant year-over-year growth in the GLP-1 segment of its online sales, though it maintains an Underperform rating due to potential risks in revenue execution. The company’s first-quarter online revenue for 2025 is projected to significantly exceed consensus estimates, indicating strong growth in this area. However, there are concerns about slowing core growth and potential impacts from regulatory changes regarding semaglutide, a key product in Hims & Hers’ lineup. The FDA has extended enforcement discretion for compounding semaglutide, offering some regulatory clarity for the company until 2025 or the resolution of an ongoing court case.
Citi has maintained a Sell rating with a $27 price target, expressing skepticism about the likelihood of success in ongoing legal proceedings related to tirzepatide, a drug not provided by Hims & Hers but relevant due to similar regulatory challenges. The legal decisions surrounding tirzepatide are seen as potentially influencing the company’s operations, particularly concerning semaglutide. Analysts at Citi anticipate that a similar outcome in favor of the FDA could impact Hims & Hers’ business, reflecting this in their Sell rating. These regulatory and legal developments are critical for investors monitoring the company’s future performance and strategy.
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