Truist Securities reiterates Hold rating on Hims and Hers stock amid softening core growth

Published 05/08/2025, 18:08
Truist Securities reiterates Hold rating on Hims and Hers stock amid softening core growth

Investing.com - Truist Securities has maintained its Hold rating and $48.00 price target on Hims and Hers (NYSE:HIMS), a $12.9 billion market cap telehealth company, following its second-quarter 2025 financial results. According to InvestingPro analysis, the stock appears overvalued at current levels, despite delivering impressive returns of over 255% in the past year.

The telehealth company reported revenues slightly below consensus expectations, while maintaining its 2025 guidance, which now includes approximately $50 million in revenue contribution from its recent Zava acquisition. Second-quarter adjusted EBITDA exceeded expectations, partly due to reduced marketing investments during certain periods of the quarter. The company maintains strong fundamentals with a 77% gross margin and has demonstrated robust revenue growth of 86% over the last twelve months.

GLP-1 related revenues for weight management reached approximately $190 million in the second quarter, slightly outperforming analyst estimates. However, non-GLP-1 revenues remained flat sequentially at $347 million, falling short of expectations as the men’s "on-demand" sexual health business continued to decline.

The company anticipates continued headwinds in its sexual health specialty business for the next few quarters as it rotates toward more premium daily offerings. Hims and Hers also expects some sequential decline in third-quarter GLP-1 revenues due to changes in shipping duration and cadence, before accelerating again in the fourth quarter.

Truist Securities expressed skepticism about the company’s ability to meet its updated 2025 outlook, noting that July card data trends showed continued softness in early third quarter, and that the guidance now relies heavily on the weight loss business maintaining stable performance in the second half compared to second-quarter trends.

In other recent news, Hims and Hers Health Inc. reported its second-quarter 2025 earnings, revealing a notable earnings per share (EPS) of $0.17, which exceeded the forecasted $0.15. However, the company’s revenue of $544.8 million fell short of the anticipated $549.87 million, marking its first revenue miss. Despite the revenue shortfall, the company achieved a 73% year-over-year revenue growth. Analysts at BTIG maintained a Buy rating on the stock, with a price target of $85.00, while noting the slowdown in the GLP-1 segment. BofA Securities reiterated an Underperform rating, citing concerns over the lack of sequential growth in the core business. Leerink Partners raised its price target to $43.00, highlighting the company’s strong margin performance. The mixed analyst ratings reflect varying perspectives on the company’s financial health and growth potential.

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