Cautious Outlook on Hims & Hers Health Amid Declining User Metrics and Revenue Uncertainty

Hims & Hers Health (HIMS – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Allen Lutz from Bank of America Securities maintained a Sell rating on the stock and has a $28.00 price target.

Allen Lutz has given his Sell rating due to a combination of factors impacting Hims & Hers Health’s performance. The company’s key performance indicators, such as order growth, app downloads, and web visits, have shown signs of weakening despite a modest increase in sales for May. This decline in user metrics raises concerns about the sustainability of the company’s core growth, especially as it faces tougher comparisons in June due to previous contributions from GLP-1 sales.
Moreover, while the company has some flexibility in advertising to potentially boost revenue, the reliance on GLP-1 contributions to meet future guidance introduces potential risks, including litigation concerns. The complexity of modeling revenue from partnerships, such as the one with NovoCare, further complicates financial forecasting. Given these challenges and the wide range of potential outcomes for the second quarter, Allen Lutz maintains a cautious outlook with a Sell rating.

In another report released on June 9, Citi also maintained a Sell rating on the stock with a $30.00 price target.

Based on the recent corporate insider activity of 228 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of HIMS in relation to earlier this year.