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On Tuesday, Truist Securities updated its financial outlook for Hims & Hers Health, Inc. (NYSE:HIMS), increasing the price target to $45.00 from the previous $33.00, while keeping a Hold rating on the stock. The adjustment comes after the healthcare company reported its first-quarter earnings for 2025 on May 5, which Truist referred to as a "Mixed Bag" due to a revenue beat driven by GLP-1 sales and reaffirmed revenue guidance for the year, alongside an elevated EBITDA forecast.
Truist’s analysis included insights from a follow-up call with Hims & Hers, discussing its partnership with Novo Nordisk (NYSE:NVO) and the future of personalized compounding. Novo Nordisk, on their earnings call, indicated an expectation for FDA enforcement against mass personalized compounding starting May 22, a stance Hims & Hers believes refers specifically to 503B facilities, which are no longer viable in a post-shortage context. Hims & Hers anticipates that personalized compounding still has a place in the market, despite Novo’s position.
The report also touched on the dynamics of the weight loss segment from the first to the second quarter. The initial quarter benefitted from one-time boosts such as the Super Bowl commercial and new year resolutions, which are not expected to repeat. Hims & Hers anticipates a sequential stepdown in Q2 due to these factors, along with some commercial subscribers leaving the platform.
Regarding the non-GLP-1 business, Hims & Hers is transitioning to daily solutions over on-demand options within the Sexual Health specialty. This shift may slow customer acquisition temporarily, as the company moves away from pursuing on-demand customers with lower attach rates and uncertain retention. The company was conservative with its marketing in the non-weight loss segments in Q1 but plans to increase marketing efforts in the coming quarters.
In updating its financial model, Truist has revised its revenue estimates for Hims & Hers for fiscal years 2025 and 2026 to $2,302 million and $2,979 million, respectively, a slight decrease from previous projections. Adjusted EBITDA estimates have been raised to $324 million for 2025 and $440 million for 2026. The new price target of $45 is based on 24 times the firm’s 2026 adjusted EBITDA estimate. Despite the raised price target, Truist reiterated its Hold rating, suggesting that unless Q2 revenues surpass guidance, the company’s second-half outlook may be optimistic.
In other recent news, Hims & Hers Health, Inc. has announced plans to offer $450 million in convertible senior notes due 2030, aimed at institutional buyers. The proceeds from this offering are intended to support the company’s global expansion and strategic acquisitions, although no specific acquisition agreements have been confirmed. Additionally, the company has appointed Mo Elshenawy as its new Chief Technology Officer to enhance its AI capabilities in healthcare services. This strategic move aligns with Hims & Hers’ objective to modernize healthcare delivery through technology.
Analysts have been adjusting their outlooks on Hims & Hers following its recent earnings report. Piper Sandler raised the company’s stock target to $39, maintaining a Neutral rating, highlighting strong quarterly performance and margin expansion. Meanwhile, BofA Securities increased its price target to $28, retaining an Underperform rating, citing potential growth scenarios and associated litigation risks. These updates reflect the analysts’ cautious optimism about the company’s financial trajectory amidst a challenging economic environment.
Hims & Hers’ recent developments indicate a focus on leveraging technology and strategic financial maneuvers to enhance its market position. The company’s initiatives are closely watched by investors and analysts, who are evaluating the potential for sustained growth and operational efficiency.
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