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On Tuesday, BTIG initiated coverage on Hims & Hers Health, Inc. (NYSE:HIMS) with a Buy rating and a price target of $35.00. The firm expressed a favorable outlook on the company, highlighting its innovative business model that provides health services through a direct-to-consumer, cash-pay approach.
Hims & Hers, which supports over 2 million members, representing a 44% year-over-year increase as of the third quarter of 2024, operates on a subscription-based model. The company tackles a variety of health issues, including obesity, sexual health, mental health, and dermatology, among other services. BTIG's analysts noted the high demand for the company's offerings and the comprehensive nature of its in-house Electronic Medical (TASE:PMCN) Record (EMR) system.
The research firm also pointed out the effective integration of Hims & Hers with its affiliated 503A and 503B pharmacies. This seamless integration is seen as a key factor in the company's ability to manage its operations and maintain the high demand for its products.
BTIG anticipates that Hims & Hers will continue to experience robust revenue growth, particularly in the GLP-1 and obesity health product categories. The firm's positive stance is further supported by its confidence in the company's management and the overall growth profile.
The new $35.00 price target set by BTIG reflects the firm's expectations for the future earnings power of Hims & Hers, as the company continues to expand its reach and impact in the health services market.
In other recent news, Hims & Hers Health, a digital health sector leader, has been the focus of several major developments. Needham & Company raised their price target on Hims & Hers and positioned it as their top pick for 2025, citing the company's diverse growth avenues. The company's strategy includes a focus on personalized product adoption and an expanding range of weight loss solutions.
Morgan Stanley (NYSE:MS) initiated coverage on Hims & Hers, assigning an Overweight rating and acknowledging its potential in the digital health and direct-to-consumer sectors. The company reported a 77% year-over-year increase in Q3 sales, surpassing $400 million, and an adjusted EBITDA over $50 million. Revenue projections for Q4 2024 range between $465 million and $470 million, indicating a significant year-over-year increase.
The FDA's resolution of the tirzepatide injection shortage may alter market dynamics for obesity drugs, impacting companies like Hims & Hers that have been offering compounded versions of such medications. However, Hims & Hers recently announced a partnership with Eli Lilly (NYSE:LLY) to streamline access to FDA-approved obesity medication Zepbound.
Ro, a digital health company, also announced a collaboration with Eli Lilly, aiming to facilitate access to Zepbound. Lastly, Hims & Hers shares saw a significant surge, with an approximate 70% increase in November, following third-quarter results that exceeded market expectations.
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