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On Tuesday, Morgan Stanley (NYSE:MS) reiterated its Equalweight rating and $40.00 price target for Hims & Hers Health, Inc. (NYSE:HIMS) following the company’s first-quarter results. The healthcare company reported a significant earnings beat, with revenue surging by 111% year-over-year to $586 million, surpassing both Morgan Stanley’s estimate of $531 million and the consensus estimate of $535 million. The company’s EBITDA for the quarter was $91 million, exceeding expectations by $30 million, largely due to higher revenue and effective cost management in sales and marketing expenses.
Hims & Hers provided second-quarter revenue guidance of $540 million and EBITDA of $70 million at the midpoint, which is slightly below the average analyst expectation of $567 million in revenue and in line with the EBITDA forecast of $71 million. Despite this, the company upheld its full-year 2025 revenue guidance between $2.3 billion and $2.4 billion and raised its EBITDA outlook by $20 million to a range of $295 million to $335 million.
The company’s first-quarter performance led to adjustments in Morgan Stanley’s financial models, with tweaks to quarterly revenue estimates, a reduction in gross margin projections, and an increase in EBITDA estimates based on the strong results. The analysts noted several positive developments, such as a 50% EBITDA beat for the quarter and a 7% increase in the 2025 EBITDA guidance. Hims & Hers’ expansion into weight loss products, including branded offerings through a partnership with Novo, is on track to generate at least $725 million in revenue by 2025. Additionally, the company anticipates launching new hormone-related products by year-end.
However, there were some concerns highlighted by the analysts. The company’s gross margin of 73% in Q1 was below the expected 77%, marking the second consecutive quarter of missing gross margin estimates. While trading at a relatively high P/E ratio of 72.83, InvestingPro analysis reveals 16 additional key insights and metrics that can help investors make more informed decisions about HIMS’s valuation and growth prospects. For comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro, offering expert insights into what really matters for this high-growth healthcare company. This quarter also represented the first time the company guided next-quarter revenue below analyst expectations, potentially signaling a moderation in revenue growth for its sexual health category and raising questions about future category growth and competitive pressures.
In other recent news, Hims & Hers Health Inc. reported its first-quarter 2025 financial results, showcasing a 111% increase in revenue year-over-year, reaching $586 million, which surpassed the forecast of $538.9 million. However, the company’s earnings per share (EPS) fell short of expectations, coming in at $0.20 against a projected $0.23. The company continues to see growth in its subscriber base, which expanded by 38% year-over-year, totaling nearly 2.4 million subscribers. Additionally, Hims & Hers announced a new collaboration with Novo Nordisk (NYSE:NVO), aimed at enhancing its offerings in the weight loss category, including the introduction of branded Wegovy. Analyst firms have not issued any recent upgrades or downgrades, but the company’s strategic partnerships and product expansions remain areas of focus. The firm also plans to launch new offerings in low testosterone and menopause support by the end of the year. These developments indicate Hims & Hers’ ongoing efforts to expand its reach and provide personalized healthcare solutions.
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