Sell Rating on Hims & Hers Health: Concerns Over ZAVA Acquisition and Strategic Fit

Daniel Grosslight, an analyst from Citi, maintained the Sell rating on Hims & Hers Health (HIMS – Research Report). The associated price target remains the same with $30.00.

Daniel Grosslight has given his Sell rating due to a combination of factors surrounding Hims & Hers Health’s recent acquisition of ZAVA. The acquisition is intended to expand HIMS’ presence in Europe and enhance its personalization strategy, but there are concerns about the financial implications and strategic fit. ZAVA operates in similar markets as HIMS but offers products at generally lower price points, which could challenge HIMS’ pricing strategy and profitability.
Additionally, ZAVA does not currently provide personalized compounded products, which HIMS sees as an opportunity but also poses a risk if the integration does not go as planned. The acquisition is expected to be accretive by 2026, but the lack of immediate financial details and the reliance on balance sheet cash for funding raises questions about the short-term financial impact. These uncertainties contribute to the high-risk assessment and the significant expected share price decline of 47.2%.

In another report released on May 22, Bank of America Securities also maintained a Sell rating on the stock with a $28.00 price target.