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On Tuesday, TD Cowen analysts maintained a Hold rating and a $38.00 price target on Hims and Hers stock (NYSE:HIMS), which is currently trading at $55.88. According to InvestingPro analysis, the stock appears overvalued despite its impressive 134.78% year-to-date return. The decision comes as the company announced its acquisition of ZAVA, a move that underlines its strategy to expand into international markets.
The acquisition of ZAVA, a European telehealth provider, aligns with Hims and Hers’ plan to extend its reach beyond the U.S. The company, which has achieved remarkable revenue growth of 85.99% and maintains a strong market capitalization of $12.56 billion, intends to expand its presence in the UK and launch services in Germany, France, Ireland, and other countries. The goal is to offer personalized care in fields such as dermatology, weight loss, sexual health, and mental health. Get deeper insights into HIMS’s expansion strategy with a comprehensive InvestingPro Research Report.
Hims and Hers anticipates the deal will be accretive by 2026 and plans to complete the acquisition in the second half of 2025. The company raised $870 million in debt to support this expansion, which analysts believe was largely anticipated by the market. InvestingPro data shows the company operates with a moderate debt level and maintains a healthy current ratio of 1.59.
Analysts at TD Cowen are looking forward to more details about the acquisition, expected to be discussed in the second quarter of 2025 earnings. They are particularly interested in understanding the cost structure in European markets, the operational strategy for ZAVA, the necessary investments for international expansion, and potential synergies with the U.S. business.
The acquisition marks a significant step in Hims and Hers’ growth strategy, with the company aiming to introduce its personalized health services across various European countries.
In other recent news, Hims & Hers Health, Inc. has announced its acquisition of ZAVA, a digital health platform operating in several European countries, including the UK, Germany, France, and Ireland. The acquisition aims to expand Hims & Hers’ international presence and is expected to positively impact financial performance by 2026. Despite the strategic move, analysts have varied opinions on the company’s stock. Truist Securities maintains a Hold rating with a $45 target, suggesting potential for further acquisitions. Citi analysts, however, reiterated a Sell rating with a $30 target, expressing skepticism about the acquisition’s impact. Leerink Partners kept a Market Perform rating with a $42 target, noting potential integration challenges. Meanwhile, BofA Securities maintained an Underperform rating with a $28 target, citing concerns about slowing order growth and international expansion risks. As Hims & Hers integrates ZAVA, the company plans to leverage its platform to enhance its service offerings across Europe.
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