Hims and Hers stock rating maintained at Underperform by BofA Securities

Investing.com - BofA Securities has reiterated its Underperform rating and $28.00 price target on Hims and Hers (NYSE:HIMS), citing mixed signals for the company’s GLP-1 franchise but ongoing concerns about core business slowdown. The target represents significant downside from current levels, despite the company’s robust revenue growth of 89% over the last twelve months. According to InvestingPro data, HIMS currently trades at a P/E ratio of 50.5x, suggesting a premium valuation.

BofA Securities analyst Allen Lutz noted that recent court cases involving Eli Lilly suggest the future of compounding may be determined more by the Food and Drug Administration than the U.S. court system. The analyst viewed Judge Birotte Jr.’s comments on personalization and interpretation of 503A guidance as positive for compounders. With a market capitalization of $10.1 billion and strong financial health metrics according to InvestingPro, HIMS maintains substantial operational capacity to navigate regulatory changes.

The research firm currently models compounded GLP-1 sales of $850 million from 2025-2028 for Hims and Hers but acknowledges a wide range of possible outcomes and low confidence in its 2027 GLP-1 sales forecast. The analyst came away "incrementally positive" on the future of HIMS’ GLP-1 franchise following recent court developments.

BofA Securities highlighted that 80 bipartisan lawmakers asked the FDA in July to stop counterfeit versions of GLP-1 drugs, with no response yet provided. The firm also noted the Trump Administration has expressed support for lowering drug prices and implementing a Most Favored Nation pricing program.

Despite some positive signals for the GLP-1 business, BofA Securities maintained its Underperform rating primarily due to concerns about slowdown in Hims and Hers’ core business. InvestingPro analysis shows the company maintains strong fundamentals with a current ratio of 5x and operates with moderate debt levels. Subscribers can access 14 additional ProTips and comprehensive valuation metrics in the full Pro Research Report, providing deeper insights into HIMS’s financial position and growth prospects.

In other recent news, GoodRx has announced a collaboration with Novo Nordisk to offer the medications Ozempic and Wegovy at a reduced price of $499 per month for eligible self-paying patients. This significant price reduction is available immediately at over 70,000 retail pharmacies nationwide. Meanwhile, Hims & Hers Health has been under the spotlight due to several developments. Truist Securities has lowered its price target for Hims & Hers to $37 from $48, citing a potential increase in GLP-1 related revenues in the upcoming quarters due to deferred revenue realization.

Additionally, Hims & Hers is facing scrutiny from the Federal Trade Commission, which has been investigating the company’s business practices for over a year, focusing on customer subscription cancellations. Further pressure on the company comes from Novo Nordisk’s expansion of its legal battle, filing new lawsuits against companies, including telehealth providers, over compounded semaglutide products. Despite these challenges, TD Cowen has raised its price target for Hims & Hers to $48, highlighting the company’s growth potential through infrastructure development and international expansion efforts. These developments reflect a dynamic period for both GoodRx and Hims & Hers Health in the healthcare industry.

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