KeyBanc reiterates Sector Weight rating on Hims and Hers stock

Investing.com - KeyBanc Capital Markets maintained its Sector Weight rating on telehealth company Hims and Hers (NYSE:HIMS) on Tuesday. The stock is currently trading at $44.39, down about 6% over the past week despite its impressive 113.82% gain over the past year.

The investment firm characterized Hims and Hers as "more of a 2H26 story" as the company navigates through a transition period that is currently affecting subscriber growth while simultaneously investing in diagnostic capabilities. Despite these near-term challenges, InvestingPro data shows the company’s revenue grew by an impressive 88.69% in the last twelve months, with net income expected to grow this year.

KeyBanc believes the company’s investments in diagnostics could potentially serve as a significant catalyst for attracting new subscribers and enhancing customer lifetime value, potentially driving positive estimate revisions for 2026 and 2027. With a market capitalization of $10.03 billion and analysts forecasting EPS of $1.33 for fiscal year 2025, the company appears positioned for continued growth.

The firm noted the stock’s volatility as a factor in its cautious stance, suggesting it would be "prudent to wait for more signs on how new products scale" before adopting a more constructive rating position. This caution is supported by InvestingPro data showing the stock’s high beta of 2.25, confirming its price movements are indeed quite volatile compared to the broader market.

KeyBanc’s decision to maintain its Sector Weight rating reflects its current neutral outlook on Hims and Hers’ near-term prospects while acknowledging potential longer-term growth opportunities. The company currently trades at a P/E ratio of 57.01, which InvestingPro identifies as a high earnings multiple. However, the company maintains strong financial health with a current ratio of 4.98, indicating its liquid assets comfortably exceed short-term obligations.

In other recent news, Hims and Hers Health reported third-quarter earnings that showed a complex financial picture. The company exceeded revenue expectations with $600 million, outperforming the forecast of $580.37 million, marking a 3.38% surprise. However, earnings per share (EPS) fell short at $0.06, missing the anticipated $0.10. Despite this, BTIG maintained its Buy rating, noting strong revenue and adjusted EBITDA growth, with revenue hitting $599 million and adjusted EBITDA reaching $78.4 million. Canaccord Genuity also reiterated a Buy rating, highlighting significant subscriber growth, particularly in multi-condition subscribers. Conversely, Needham held a Hold rating due to concerns about near-term investment impacts despite expansion plans. BofA Securities raised its price target to $32 from $28 but maintained an Underperform rating, attributing it to mixed quarterly results and challenges in the Sexual Health business. These developments reflect a varied investor sentiment driven by the company’s latest performance.

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