On Tuesday, Citi increased its stock price target for Hims and Hers Health, Inc. (NYSE:HIMS) to $24 from $20 while maintaining a Neutral rating. The revision follows the company's recent earnings report, which exceeded expectations and included a raised forecast.
The performance was notably driven by the introduction of Hims & Hers' GLP-1 program, which garnered attention during the earnings call and subsequent discussions with management.
The company's GLP-1 program, a treatment for weight loss, has been a key factor in its strong financial results. Citi's analysis indicates growing confidence in Hims & Hers' ability to offer a comprehensive weight loss solution once current market shortages of GLP-1 are resolved.
The anticipated solution is expected to include personalized compounded GLP-1 dosages, oral medications, and Liraglutide, a GLP-1 receptor agonist.
Beyond the GLP-1 program, Hims & Hers has shown robust growth in its non-GLP-1 business, with a 40% year-over-year increase in subscribers. Half of these subscribers are engaging with personalized solutions, which has contributed to better retention rates and cross-selling opportunities. This aspect of the business is also performing above expectations, underscoring the company's overall positive momentum.
Despite the positive outlook, Citi cautions that Hims & Hers' stock may experience volatility. Market sensitivity to news about GLP-1 shortages and strategic moves by competitors Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) to protect their branded products could impact Hims & Hers' share performance.
In summary, the price target raise reflects the company's strong financial performance and promising growth prospects, particularly in personalized healthcare solutions. However, investors are advised to be mindful of the potential market fluctuations due to industry-specific developments.
In other recent news, Hims & Hers Health Inc. reported robust financial performance, with third-quarter revenue surpassing $400 million, marking a significant 77% increase year-over-year. The company's adjusted EBITDA also grew, reaching over $50 million, indicating a healthy 13% margin.
Truist Securities maintained a Hold rating on Hims & Hers Health, despite the company's strong performance, particularly in revenue generated from GLP-1 related products, which exceeded expectations. BofA Securities, however, maintained a Buy rating and increased the price target to $27 from $25, following the strong Q3 performance.
Hims & Hers also announced plans to increase marketing expenditures in Q4, aiming to capitalize on the growing recognition of its weight loss offerings. The company is also planning to launch liraglutide, the first generic GLP-1, in 2025.
For Q4 2024, Hims & Hers is forecasting a 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 & Hers Health's recent financial performance and growth prospects, as highlighted in Citi's analysis, are further supported by real-time data from InvestingPro. The company's revenue growth of 50.15% over the last twelve months and a robust 51.82% quarterly growth rate as of Q2 2024 underscore its strong market position and the success of its personalized healthcare solutions, including the GLP-1 program.
InvestingPro Tips reveal that Hims & Hers has been profitable over the last twelve months, with analysts predicting continued profitability this year. This aligns with Citi's positive outlook on the company's financial trajectory. Moreover, the company's liquid assets exceeding short-term obligations suggest a solid financial foundation to support its growth initiatives.
However, investors should note that Hims & Hers is trading at a high P/E ratio of 246.82, which may reflect the market's optimistic expectations for future growth. This high valuation multiple is consistent with the company's impressive 220.37% price return over the past year, as reported by InvestingPro.
For those seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for Hims & Hers Health, providing deeper insights into the company's financial health and market position.
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