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On Tuesday, Needham analysts raised the price target for Hims and Hers stock (NYSE: HIMS) to $65 from $61, maintaining a Buy rating. The company, currently valued at $12.25 billion, has demonstrated remarkable growth with a 126.34% year-to-date return. This decision follows Hims and Hers’ announcement of its acquisition of ZAVA, a direct-to-consumer telemedicine platform in Europe.
The acquisition was disclosed before the market opened on Monday. While specific details of the deal remain limited, the company expects the transaction to close in the second half of 2025. The acquisition is anticipated to provide accretive benefits by 2026, building on the company’s impressive 85.99% revenue growth over the last twelve months. In the short term, it will expand Hims and Hers’ presence in Germany and France, and to a lesser degree, in Ireland, where the company currently has no footprint. It will also strengthen existing operations in the UK.
ZAVA is expected to be a strategic entry point for Hims and Hers to broaden its reach across Western Europe. The company sees potential in leveraging its existing solutions to cater to similar demographics in these new international markets. According to InvestingPro, Hims and Hers maintains a "GREAT" financial health score, suggesting strong potential for successful international expansion.
Needham analysts expressed a positive outlook on the acquisition, emphasizing that Hims and Hers’ current offerings are well-suited for the European market. This move is seen as a long-term growth opportunity for the company, which currently trades at a P/E ratio of 73.61, reflecting high growth expectations.
In other recent news, Hims and Hers has announced its acquisition of ZAVA, a European telehealth provider, as part of its strategy to expand internationally. The company plans to complete the acquisition in the second half of 2025 and expects it to contribute positively to earnings by 2026. Analysts from Morgan Stanley (NYSE:MS), TD Cowen, Truist Securities, Citi, and Leerink Partners have all maintained their ratings on Hims and Hers stock, with varying price targets. Morgan Stanley and TD Cowen have kept their ratings at Equalweight and Hold, respectively, while Truist Securities also maintains a Hold rating. Citi analysts reiterated a Sell rating, and Leerink Partners continues with a Market Perform rating.
The acquisition aligns with Hims and Hers’ plans to extend its reach beyond the U.S., targeting markets in the UK, Germany, France, and Ireland. Financial backing for this acquisition includes $870 million in debt raised by the company. Analysts at Truist Securities expect the acquisition to add about 2% to the company’s 2025 revenue. Meanwhile, Citi analysts highlight that ZAVA offers services similar to Hims and Hers, with a notable difference in the pricing of branded GLP-1s. Despite the strategic benefits, analysts have noted potential challenges in integrating ZAVA with Hims and Hers’ current operations.
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