On Monday, Canaccord Genuity increased its price target for Hims & Hers Health, Inc. (NYSE:HIMS) to $24.00, up from the previous $20.00, while maintaining a Buy rating on the stock. The adjustment follows the company's announcement of a new addition to its weight loss treatment options.
Hims & Hers, a telehealth company, has expanded its weight loss solutions by introducing GLP-1 treatment, with monthly prices starting at $199. This new offering includes GLP-1 injections, which are compounded medications containing the same active ingredients found in well-known brands such as Ozempic and Wegovy. The treatment compliments the existing oral medication kits available on Hims & Hers' platform.
The expansion into GLP-1 treatment is seen as a significant move for the company, given that approximately 70% of American adults are considered obese or overweight, according to the FDA. Moreover, the market for weight loss drugs is expected to grow substantially, potentially reaching over $80 billion by 2032, a steep increase from $2 billion in 2022, as projected by DataHorizzon Research.
Following the announcement, shares of Hims & Hers saw a 28% increase in their value. While there are some questions surrounding the new offering, the launch is anticipated to substantially broaden the company's addressable market.
Additionally, it is expected to enhance the platform's cross-selling capabilities by offering high-demand medication at affordable prices, which could positively impact the company's financial performance over time.
InvestingPro Insights
Following Canaccord Genuity's updated price target for Hims & Hers Health, Inc., a glance at real-time data from InvestingPro reveals an optimistic financial landscape for the telehealth company. With a market capitalization of $3.77 billion and a remarkable revenue growth of 55.65% over the last twelve months as of Q1 2024, Hims & Hers is demonstrating a robust expansion trajectory. The company's gross profit margin stands at an impressive 82.41%, underscoring its ability to maintain profitability despite the costs associated with launching new products like the GLP-1 treatment.
InvestingPro Tips highlight the potential for net income growth this year, with three analysts having revised their earnings upwards for the upcoming period. This aligns with the company's strategic move into the growing weight loss drug market and could signal confidence in the financial prospects of Hims & Hers. Additionally, the company has experienced a significant return over the last week, month, and three months, with a one-week price total return of 26.88% and a three-month price total return of 85.82%, reflecting investor enthusiasm following the GLP-1 treatment announcement.
For those seeking a deeper analysis, InvestingPro offers additional insights into Hims & Hers Health, Inc., including a total of 14 InvestingPro Tips available on their platform. Readers interested in these valuable insights can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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