Piper Sandler raises Hims & Hers stock target to $39, keeps neutral

On Tuesday, Piper Sandler analyst Korinne Wolfmeyer increased the price target on Hims & Hers Health, Inc. (NYSE:HIMS) to $39.00, up from $35.00, while maintaining a Neutral rating on the stock. Wolfmeyer’s adjustment followed Hims & Hers’ first-quarter earnings report, which surpassed expectations, and the announcement of a new partnership with Wegovy. Despite these positive developments, the company’s decision to maintain its full-year sales outlook has led to a cautious response from investors in after-hours trading.

Hims & Hers reported a strong first quarter, prompting management to reiterate their full-year sales forecast. They also unveiled an ambitious long-term plan and reported expanding margins. Wolfmeyer noted that while the company is showing stronger financial performance compared to others in the sector, the unchanged sales guidance has put pressure on the stock after hours. The analyst believes that the company’s steady growth and margin expansion are commendable, especially given the current economic climate.

The analyst commented on the company’s situation, stating that Hims & Hers is creating a "show-me story" for itself, which presents a challenge. The term "show-me story" refers to a situation where a company must demonstrate its ability to achieve its ambitious goals to gain investor confidence. The analyst pointed out that while the quarterly results were positive and the long-term outlook is intriguing, the lack of increased sales guidance and uncertainties around near-term weight loss expectations make the investment case difficult to support.

Wolfmeyer highlighted that Hims & Hers is one of the rare companies experiencing double-digit growth and margin expansion in a challenging macroeconomic environment. Despite these strengths, the cautious stance from Piper Sandler suggests that investors are looking for more concrete signs of sustainable growth before fully committing to the stock.

In summary, while Piper Sandler acknowledges the solid financial performance of Hims & Hers, the firm remains on the sidelines due to the company’s conservative sales outlook and the challenges it faces in convincing investors of its long-term potential. The price target increase reflects the company’s recent successes, but Piper Sandler awaits further evidence of sustainable growth.

In other recent news, Hims & Hers Health, Inc. has seen a series of analyst evaluations following its latest earnings reports. The company’s first-quarter results exceeded expectations, driven primarily by its GLP-1 related offerings, contributing significantly to the revenue beat. However, the second-quarter revenue guidance did not meet market expectations due to a transition in customer subscriptions. Despite this, Hims & Hers has reaffirmed its full-year outlook and increased its full-year EBITDA expectations by $15 to $20 million.

Analysts have responded with varied adjustments to their price targets. BofA Securities raised its target to $28 while maintaining an Underperform rating, citing improved operating leverage. TD Cowen increased the target to $38, keeping a Hold rating, and noted challenges in surpassing financial expectations amid growing competition. Leerink Partners raised the target to $42, maintaining a Market Perform rating, and highlighted a robust trajectory for the company. Needham maintained a Buy rating with a $61 target, expressing confidence in the company’s long-term strategy despite short-term guidance concerns. Truist Securities, meanwhile, held a $33 target with a Hold rating, noting mixed financial results and the company’s commitment to compliance with medical guidelines.

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