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Investing.com -- Analysts at Citi and Bank of America are maintaining a cautious stance on Hims & Hers Health as competition in the GLP-1 space intensifies and growth begins to moderate.
In a note Thursday, Citi flagged potential pressure from Evernorth’s newly announced benefit that caps patient out-of-pocket costs for GLP-1 drugs Wegovy and Zepbound at $200 per month, well below the $599 per month pricing offered through Hims’ new NovoCare partnership.
“To the extent we see plan sponsors adopt this offering, we do think that this will be a slight headwind to HIMS’ newly announced NovoCare partnership,” Citi said. They noted that Evernorth’s model may also appeal to employers, as it could simplify access and help shift patient costs toward insurance.
The bank kept its Sell rating and $30 per share target price for the stock.
Bank of America echoed concerns about sustainability. They note that April data showed a 6% sequential decline in total sales and the second consecutive month of lower GLP-1 sales.
“Revenue growth ex-GLP-1s has slowed significantly,” BofA wrote, citing increased ad focus on GLP-1 offerings, rising competition, and softer returns from long-duration subscriptions.
The firm also warned that regulatory scrutiny on compounded semaglutide could cloud Hims’ FY25 outlook. “The ability to meet the FY25 guide hinges on the scale of personalized GLP-1s,” BofA wrote, noting that the upcoming end of the 503B compounding grace period could prompt FDA or Novo Nordisk (NYSE:NVO) action.
BofA maintained an Underperform rating and $28 price target on HIMS.