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On Tuesday, TD Cowen maintained its positive stance on Hims & Hers Health, Inc. (NYSE:HIMS), reiterating a Buy rating and a $25.00 price target for the company's stock.
The endorsement follows a strong financial performance in the third quarter of 2024, where Hims & Hers reported a significant 77% year-over-year increase in sales and an adjusted EBITDA that was 32% higher than Wall Street expectations, amounting to $51 million.
The firm's guidance for the fourth quarter of 2024 also surpassed expectations, suggesting an approximate 90% year-over-year growth in sales and an adjusted EBITDA margin of around 11%. Despite uncertainties regarding the company's ability to continue offering compounded GLP-1s, TD Cowen expressed optimism due to the robust core business growth, which the firm estimates to be around 60% or more.
The analyst from TD Cowen highlighted the company's solid third-quarter performance and the encouraging signs for the upcoming quarter. "HIMS delivered a solid 3Q24 with sales up +77% y/y and adj. EBITDA tracking 32% above Street at $51mm. 4Q24 guide was better than expected implying ~90% y/y sales growth and ~11% adj. EBITDA margin," the analyst noted.
The statement also addressed the potential challenges faced by Hims & Hers, particularly concerning the GLP-1 offerings. However, the firm's confidence seems to be buoyed by the overall growth trajectory of the company's core business operations.
Investors and market watchers will likely keep a close eye on Hims & Hers as it progresses into the fourth quarter, monitoring the company's performance in light of the positive outlook provided by TD Cowen. The analyst's comments suggest that, despite certain risks, the fundamental growth of Hims & Hers remains on a solid upward path.
In other recent news, Hims & Hers Health, Inc. reported a significant 77% year-over-year increase in third-quarter revenue, exceeding $400 million. The company's adjusted EBITDA also grew, reaching over $50 million, indicating a healthy 13% margin.
Citi, Truist Securities, and BofA Securities have all updated their outlooks on the company following this strong performance. Citi raised its price target for Hims & Hers to $24, while Truist maintained a Hold rating with a steady target of $23. BofA Securities, however, increased the price target to $27 from $25.
Hims & Hers' growth is notably driven by its GLP-1 program, a treatment for weight loss, and its non-GLP-1 business, which saw a 40% year-over-year increase in subscribers. The company also announced plans to increase marketing expenditures in Q4 and to launch liraglutide, the first generic GLP-1, in 2025.
Looking ahead, Hims & Hers is forecasting Q4 2024 revenue between $465 million and $470 million, marking an 89% to 91% year-over-year increase. The full-year revenue is projected to be between $1.46 billion and $1.465 billion, reflecting a 67% to 68% increase.
These are recent developments in the company's operations.
InvestingPro Insights
Hims & Hers Health, Inc. (NYSE:HIMS) continues to demonstrate impressive growth, as reflected in both the TD Cowen analysis and recent InvestingPro data. The company's revenue growth of 50.15% over the last twelve months aligns with the strong sales performance highlighted in the article. Additionally, the EBITDA growth of 165.4% over the same period underscores the company's improving profitability, which is consistent with the better-than-expected adjusted EBITDA reported in Q3 2024.
InvestingPro Tips further support the positive outlook for HIMS. The expectation of net income growth this year and the fact that analysts predict the company will be profitable this year corroborate TD Cowen's optimistic stance. Moreover, the strong return over the last year, with a 220.37% price total return, reflects investor confidence in the company's growth trajectory.
For readers seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for HIMS, providing a deeper understanding of the company's financial health and market position.
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