On Tuesday, Deutsche Bank increased the price target for Hims & Hers Health, Inc. (NYSE:HIMS) shares from $14.00 to $16.00 while maintaining a Hold rating on the stock. The adjustment follows the company's announcement of raised revenue guidance for 2024, reflecting stronger than anticipated growth.
The company's management has revised its 2024 revenue outlook upward by $30 million at the midpoint, now expecting revenues to range between $1.2 billion and $1.23 billion. This projection suggests an approximate 39% year-over-year growth, an increase from the previously forecasted 36%.
Additionally, the full-year adjusted EBITDA estimate has been improved by approximately $18 million at the midpoint, with new expectations set between $120 million and $135 million. This improvement indicates margins that could range from 10% to 11%, compared to the 9% to 10% margins previously anticipated.
This updated financial outlook from Hims & Hers surpasses the consensus revenue estimate of $1.19 billion and the adjusted EBITDA estimate of $113.7 million that was held by analysts. The company has attributed this positive momentum to a significant rise in the number of subscribers opting for personalized offerings over the past two years. The number of members engaging with personalized services has reached over 600,000, accounting for 35% of the total membership base.
The firm's management believes that the trend towards personalization will continue to enhance customer retention and operating efficiencies. In line with this strategy, Hims & Hers is planning to introduce a GLP-1s weight loss program within the current year, which is expected to attract additional customers to its platform.
InvestingPro Insights
Following the positive revision of Hims & Hers Health, Inc.'s financial outlook and Deutsche Bank's price target increase, InvestingPro data offers a deeper dive into the company's financial health. With a market capitalization of $2.5 billion, Hims & Hers showcases robust revenue growth, reporting a 65.49% increase in the last twelve months as of Q4 2023. The company's gross profit margin stands impressively at 81.99%, reflecting strong profitability potential on its sales. However, it's worth noting that despite this potential, the company has not been profitable over the last twelve months, with a P/E ratio of -103.30, and is trading at a high Price / Book multiple of 7.27.
InvestingPro Tips highlight two important aspects for potential investors: Hims & Hers holds more cash than debt on its balance sheet, which is a positive sign of financial stability, and analysts predict that the company will be profitable this year. Moreover, the stock's recent performance suggests that it is currently in oversold territory, according to the RSI indicator. For those looking to explore further, there are 10 additional InvestingPro Tips available, which can provide more nuanced investment guidance. Interested readers can take advantage of these insights with a special offer: use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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