Cautious Outlook on Hims & Hers Health Amid Expansion and Margin Concerns

Hims & Hers Health (HIMS – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Craig Hettenbach from Morgan Stanley maintained a Hold rating on the stock and has a $60.00 price target.

Craig Hettenbach’s rating is based on a combination of factors that influence the current and future performance of Hims & Hers Health. The company is expanding its weight loss offerings by including Lilly’s branded tirzepatide and generic liraglutide, which could potentially help achieve its ambitious revenue target of $725 million by 2025. However, there is ongoing debate about the growth prospects of these products, and whether they will be sufficient to meet the company’s revenue goals remains uncertain.
Another consideration in Hettenbach’s Hold rating is the difference in profit margins between branded tirzepatide and compounded GLP-1 products, with the former likely yielding lower margins. Additionally, the partnerships with other telehealth platforms, while beneficial for subscriber retention and expansion, are non-exclusive and may not provide a significant competitive edge. These factors contribute to a cautious outlook, justifying the Hold rating as investors await more clarity on the company’s ability to deliver on its financial guidance.

In another report released yesterday, Leerink Partners also reiterated a Hold rating on the stock with a $40.00 price target.

Based on the recent corporate insider activity of 237 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.