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On Tuesday, Needham maintained a Buy rating on Hims & Hers Health, Inc. (NYSE: HIMS) and significantly increased its price target, moving from $31.00 to $61.00. The adjustment follows the company’s robust fourth-quarter financial results. Needham’s analysts highlighted the company’s performance, despite recent market reactions to the Food and Drug Administration’s announcement that the semaglutide shortage had ended.
Hims & Hers Health’s shares experienced a sell-off after the FDA’s statement last week, which indicated a potentially shorter period for revenue generation from the commercially available doses of semaglutide. However, Needham analysts pointed out that Hims & Hers Health anticipates a sustained revenue stream from weight loss products through fiscal year 2025. This expectation is based on a mix of personalized semaglutide, oral weight loss products, and generic liraglutide, which is slated for launch in the latter half of the year.
The company has set its fiscal year 2025 guidance well above the consensus, predicting $725 million in weight loss revenue. This forecast surpasses the bullish scenario outlined in Needham’s 2025 top pick report. The analysts see this as a reason to maintain their positive stance on Hims & Hers Health, suggesting that the company’s growth prospects remain strong.
The firm’s confidence is also supported by the continued expansion in Hims & Hers Health’s non-weight-related business, which is projected to grow by more than 35% in fiscal year 2025. The analysts believe that this growth, coupled with the durable weight loss revenue stream, presents a compelling case for investment in the company’s stock.
In other recent news, Hims & Hers Health, Inc. reported impressive fourth-quarter results, with revenue reaching $481.1 million, marking a 95% increase year-over-year, surpassing both BTIG’s and consensus estimates. Despite this strong performance, BofA Securities maintained an Underperform rating, citing skepticism about the company’s revenue growth forecasts, particularly concerning core revenue growth excluding GLP-1s. Meanwhile, Citi raised its price target for the company to $27.00 but maintained a Sell rating, expressing skepticism about the company’s revenue guidance, which projects significant growth from weight loss products.
Morgan Stanley (NYSE:MS) maintained its Equalweight rating with a $60 target, noting the company’s focus on weight loss treatments, which are expected to grow significantly by 2025. Leerink Partners also maintained a Market Perform rating with a $24 target, highlighting that while revenue surpassed estimates, EBITDA fell short, and future revenue guidance was higher than anticipated. According to BTIG, Hims & Hers forecasts revenues between $2.3 and $2.4 billion for 2025, with weight loss specialties contributing significantly to the total revenue.
The company’s strategic focus on expanding its weight loss specialty offerings, including GLP-1 treatments, is a key driver of its robust revenue growth. However, BofA Securities pointed out potential challenges, including increased competition and execution risks. Despite the varied analyst opinions, the company’s forward guidance and market responses to its weight loss segment remain areas of interest for investors.
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