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On Tuesday, Leerink Partners analysts reiterated their Market Perform rating on Hims and Hers stock (NYSE:HIMS) with a price target of $42.00. The decision follows the company’s acquisition of ZAVA, a private entity, marking a strategic international expansion for Hims and Hers. The company, currently valued at $14.68 billion, has demonstrated remarkable growth with a 134.78% year-to-date return. According to InvestingPro analysis, HIMS is currently trading above its Fair Value, suggesting a premium valuation.
The acquisition of ZAVA is expected to significantly enhance Hims and Hers’ global presence. ZAVA’s offerings align with Hims and Hers’ existing services and future growth plans, including hormone replacement therapy (HRT). The deal is anticipated to broaden the company’s geographic reach and increase its user base due to ZAVA’s current market standing. The expansion comes as HIMS demonstrates strong financial performance, with revenue growing 85.99% over the last twelve months. For deeper insights into HIMS’s growth metrics and 16 additional ProTips, consider accessing the comprehensive research available on InvestingPro.
Despite the strategic benefits, Leerink Partners analysts noted potential execution and integration challenges. They highlighted that Hims and Hers’ U.S. operations are currently navigating several challenges, including a slowdown in its base business and the launch of a branded GLP-1 offering. Integrating a European digital health platform adds complexity to the company’s operations.
While the acquisition presents opportunities for growth, the analysts expressed caution regarding potential integration risks. They noted that U.S. healthcare companies have historically faced challenges when expanding into the European market through mergers and acquisitions, even in the direct-to-consumer sector.
Overall, while the analysts see potential positives from the acquisition, they maintain their Market Perform rating on Hims and Hers, acknowledging the stock’s favorable response to the company’s expanded total addressable market.
In other recent news, Hims & Hers Health, Inc. has announced its acquisition of ZAVA, a digital health platform in Europe. This move is expected to expand the company’s operations in the United Kingdom (TADAWUL:4280) and introduce its services to Germany, France, and Ireland. The acquisition aims to enhance Hims & Hers’ international reach and is anticipated to positively impact its financial performance by 2026. Meanwhile, BofA Securities has maintained an Underperform rating on Hims and Hers, citing concerns about a slowdown in order growth and challenges in international expansion. The analysts emphasize risks associated with the company’s growth strategy, particularly in the U.S. market.
Additionally, Citi has reiterated a Sell rating on Hims & Hers, maintaining a $30 price target. This comes in light of Hims & Hers’ recent pricing adjustments for Wegovy, a prescription obesity care treatment, which now offers a 6-month plan for $549 per month. The company’s pricing strategy is seen as a response to competitive pressures from NovoCare, which introduced a promotional offer for Wegovy. The Citi analyst notes that this competitive pricing environment could pose challenges for Hims & Hers. These developments reflect the company’s ongoing efforts to navigate a dynamic market landscape.
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