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Investing.com -- TD Cowen downgraded Hims & Hers Health to "Hold" from "Buy" citing a lack of near-term catalysts and concerns over the company’s weight loss revenue guidance in a post-compounded GLP-1 environment.
Separately, Hims Hers Health shares surged after the telehealth group announced a "long-term collaboration" with Novo Nordisk (NYSE:NVO) A/S to offer the Danish firm’s blockbuster Wegovy obesity drug on its platform.
Upside to the remainder of the year could be limited after a strong 1Q25E EPS, analysts wrote, noting compounded GLP-1s are no longer offered beyond May 22, TD said.
The firm expects a Q1 beat, driven by demand for compounded GLP-1s, but warned that comparisons remain tough throughout 2025 and 2026.
TD Cowen flagged three main risks: potentially optimistic weight loss revenue guidance of $725 million for FY25, uncertainty around patient switching behavior to alternative therapies like Liraglutide and oral meds, and an intensifying competitive landscape with platform like Lilly Direct.
It also pointed to broader recession risks and muted consumer demand as factors to monitor.
Despite high short interest of around 34%, the analysts believe estimates will likely come down for both FY25 and FY26, presenting downside risk.
The price target was lowered to $30, based on ~2.6x FY2 EV/Sales.
We move to the sidelines as near-term upside may be limited but we like the story for the long-term as HIMS remains committed to making healthcare accessible for all