Hims & Hers Health: Hold Maintained as Profitability Pressures Offset Growth; $21 Price Target Reiterated

Analyst Craig Hettenbach of Morgan Stanley maintained a Hold rating on Hims & Hers Health, retaining the price target of $21.00.

Craig Hettenbach has given his Hold rating due to a combination of factors related to Hims & Hers Health’s growth strategy and profitability profile. Management is aggressively pursuing revenue expansion and even raised its longer-term sales outlook, yet this comes alongside reduced EBITDA guidance and a notable decline in gross margins, signaling profitability pressure and the need for investor patience.

At the same time, the company delivered its first EBITDA miss, with Q1 results falling short of Street expectations and near-term EBITDA guidance sitting below consensus despite stronger top-line targets. While international performance and the renewed Novo partnership are encouraging, Hettenbach believes the stock’s upside is constrained until there is clearer evidence of sustainable margin improvement and positive EBITDA revisions, supporting a Hold rating and an unchanged $21 price target.

In another report released today, Citi also assigned a Hold rating to the stock with a $28.00 price target.