Analyst Allen Lutz from Bank of America Securities maintained a Sell rating on Hims & Hers Health and keeping the price target at $28.00.
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Allen Lutz’s rating is based on recent regulatory changes announced by the FDA that are expected to impact the direct-to-consumer advertising model significantly. The FDA now requires full safety information to be included in advertisements, which could make them longer and less appealing, potentially increasing customer acquisition costs for companies like Hims & Hers Health.
These changes are likely to create additional volatility in the industry, particularly affecting companies that rely heavily on direct-to-consumer advertising. Despite Hims & Hers Health’s strong brand presence and first-mover advantage, the increased regulatory scrutiny and competitive pressures in sectors such as sexual health, hair loss, and weight loss could make it more challenging to attract new customers. As a result, Allen Lutz maintains a cautious outlook with a Sell rating, anticipating continued near-term volatility.
According to TipRanks, Lutz is a 4-star analyst with an average return of 7.1% and a 63.23% success rate. Lutz covers the Healthcare sector, focusing on stocks such as Teladoc, Doximity, and CVS Health.
In another report released yesterday, Citi also maintained a Sell rating on the stock with a $30.00 price target.