Sell Rating for Hims & Hers Health Amid Potential Partnership Risks and Revenue Impact

Citi analyst Daniel Grosslight has maintained their bearish stance on HIMS stock, giving a Sell rating on June 3.

Daniel Grosslight has given his Sell rating due to a combination of factors related to Hims & Hers Health’s current business strategy and market dynamics. One of the key reasons is the potential partnership with LLY, which imposes restrictions on offering compounded tirzepatide and semaglutide. This restriction could significantly impact Hims & Hers Health’s revenue, as a substantial portion is expected to come from personalized GLP-1s this year.
Furthermore, the financial comparison between Hims & Hers Health’s compounded and branded offerings shows a potential decrease in gross profit if they shift towards a branded partnership. The uncertainty surrounding whether Hims & Hers Health’s strategy aligns with LLY’s definition of “mass compounding” adds to the risk. As a result, the expected share price return is projected to decline by 47.2%, leading to the Sell rating.

In another report released on June 3, Bank of America Securities also maintained a Sell rating on the stock with a $28.00 price target.

Based on the recent corporate insider activity of 229 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.