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On Tuesday, BofA Securities analysts reiterated their Underperform rating for Hims and Hers stock (NYSE:HIMS), maintaining a price target of $28.00. According to InvestingPro data, HIMS has seen remarkable performance with a 134.78% year-to-date return, though current analysis suggests the stock is trading above its Fair Value. The company maintains a strong gross profit margin of 77.04% and currently commands a market capitalization of $12.71 billion. The decision is based on data from Bloomberg Second Measure, which shows a slowdown in order growth for the company. Orders are reported to be growing at a rate of just 3-4% year-over-year in the second quarter through mid-May, compared to 8% in the first quarter and an average of 18-19% in 2024. This contrasts with the company’s overall revenue growth of 85.99% in the last twelve months, as reported in InvestingPro’s detailed financial analysis, which includes 16 additional key insights about HIMS’s performance and valuation.
The analysts express concerns about the company’s international expansion amid a slowdown in the U.S. business, citing potential product saturation and increased competition in the domestic market. They note that U.S. healthcare technology companies, such as Cerner (NASDAQ:CERN) and Teladoc’s BetterHelp, have generally faced challenges in international markets due to differing regulatory environments.
In addition, initial data from Similar Web indicates a 13% year-over-year decline in Zava’s desktop and mobile visits. This decline is part of the analysts’ initial assessment of the Zava asset, which Hims and Hers acquired, as well as the company’s international strategy and future trends in the U.S. market. For deeper insights into HIMS’s acquisition strategy and comprehensive financial analysis, investors can access the full Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
The BofA Securities analysts maintain their Underperform rating, emphasizing the risks associated with the company’s current growth strategy. They suggest that the international expansion may not offset the challenges faced in the U.S. market.
As the situation develops, the analysts plan to continue monitoring the company’s performance, especially in light of these initial observations and potential changes in market conditions.
In other recent news, Hims & Hers Health, Inc. has announced its acquisition of ZAVA, a European digital health firm, in an all-cash deal expected to close in the second half of 2025. This strategic move will expand Hims & Hers’ operations into the United Kingdom (TADAWUL:4280), Germany, France, and Ireland, with plans to enter additional European markets. The company anticipates that integrating ZAVA’s operations will positively contribute to its financial performance by 2026. Additionally, Hims & Hers has introduced a new pricing strategy for Wegovy®, a prescription obesity treatment, offering it at $549 per month for a six-month period. This promotion aims to make obesity care more accessible and is available until June 30, 2025, for new customers.
Analyst perspectives on Hims & Hers have varied, with Citi maintaining a Sell rating and a $30 price target, citing potential challenges from competitors’ pricing strategies. NovoCare’s new promotion for Wegovy poses a competitive threat, as it offers a significant discount for the first month, potentially drawing customers away from Hims & Hers. Meanwhile, Truist Securities has maintained a Hold rating with a $45 price target, highlighting Evernorth’s new pharmacy benefit that caps the cost of weight loss medications, which could impact Hims & Hers’ cash pay market. These developments reflect the dynamic landscape in which Hims & Hers operates, as it continues to adapt its strategies in response to market trends and competitive pressures.
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