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On Tuesday, Truist Securities maintained its Hold rating on shares of Hims and Hers Health Inc. (NYSE:HIMS), with a steady price target of $23.00. The company's third-quarter financials surpassed expectations, particularly in revenue generated from GLP-1 related products.
The analyst noted that the revenue from these products was significantly higher than anticipated, reaching an estimated $60-$65 million compared to the forecasted $40 million before the third quarter.
The performance of Hims and Hers in the third quarter was notably robust, with the company not only exceeding forecasts but also raising its guidance above what was widely expected. This "Beat and Raise" outcome for the quarter has been attributed primarily to the unexpected surge in GLP-1 related revenue.
Despite the positive results and the potential for shares to react favorably, Truist Securities has opted to maintain its Hold rating on the stock. The decision reflects ongoing developments in the market for GLP-1 related products, including recent updates from the FDA regarding GLP-1 weight loss drugs by Novo Nordisk (NYSE:NVO), which does not have a rating (NR) from Truist.
The firm also cites persistent uncertainties concerning the future role of compounded GLP-1 products following a resolution to the supply shortage.
Hims and Hers, known for its direct-to-consumer wellness and healthcare products, has been actively involved in the market for GLP-1 related treatments. The company's performance in this segment has been a key factor in its third-quarter financial results.
The analyst's comments highlight the dynamic nature of the healthcare market, particularly in areas subject to regulatory changes and supply dynamics. While Hims and Hers has demonstrated strong performance in the third quarter, the cautious outlook from Truist Securities suggests that investors should consider the broader context within the pharmaceutical industry.
In other recent news, Hims & Hers Health, Inc. has demonstrated robust financial performance. The company reported a substantial 77% year-over-year revenue increase in its third quarter, surpassing $400 million.
Additionally, its adjusted EBITDA grew to over $50 million, indicating a healthy 13% margin. BofA Securities has updated its outlook on the company, maintaining a Buy rating and increasing the price target to $27 from $25, following strong Q3 performance.
Hims & Hers also announced plans to boost marketing expenditures in Q4, aiming to capitalize on the growing recognition of its weight loss offerings. BofA Securities views this as an opportunity to expand the user base while balancing investments with margin expansion. The company also plans to launch liraglutide, the first generic GLP-1, in 2025, despite an ongoing GLP-1 medication shortage.
Hims & Hers is forecasting a 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 the recent developments in the company's operations.
InvestingPro Insights
Hims and Hers Health Inc. (NYSE:HIMS) has shown remarkable financial performance, aligning with the analyst's positive observations. InvestingPro data reveals that the company's revenue growth stands at an impressive 50.15% for the last twelve months as of Q2 2024, with quarterly revenue growth reaching 51.82% in Q2 2024. This robust growth trajectory supports the company's strong third-quarter performance mentioned in the article.
InvestingPro Tips highlight that management has been aggressively buying back shares, which often signals confidence in the company's future prospects. Additionally, the company is expected to be profitable this year, with net income projected to grow. These factors may contribute to the positive sentiment surrounding HIMS stock, despite Truist Securities maintaining a Hold rating.
It's worth noting that HIMS is trading at a high P/E ratio of 246.82, which could be a reflection of the market's high growth expectations for the company. This valuation metric aligns with the article's mention of the company's strong performance and raised guidance.
For investors 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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