On Monday, Canaccord Genuity maintained a Buy rating on Hims & Hers Health, Inc. (NYSE:HIMS), while increasing the stock's price target to $38 from the previous $28. The firm's decision follows a notable surge in the company's shares, which saw an approximate 70% increase in November.
The health and wellness company, known for its direct-to-consumer telehealth services, reported third-quarter results that exceeded market expectations in both revenue and profitability. Despite a slight shortfall in subscriber numbers compared to consensus estimates, Hims & Hers showcased a year-over-year subscriber growth of over 40%.
The growth was particularly strong among non-GLP-1 subscribers, which also rose by about 40% compared to the previous year. Additionally, the number of subscribers now utilizing personalized solutions has seen an impressive increase of 175% year-over-year.
Hims & Hers' strategy involving GLP-1s, which includes personalized dosing and frequent provider communication, has been effective in retaining customers. The management has expressed confidence in the company's ability to continue offering compounded personalized GLP-1 solutions, even without a shortage environment.
The company also strengthened its leadership in November by bringing on two notable industry veterans. Deb Autor, a former deputy commissioner at the FDA, joined the Hims & Hers board. Additionally, Janet Stevens, recognized for her expertise in pharmaceutical quality, was appointed as the Global Head of Quality and Safety. These strategic appointments are expected to bolster the company's commitment to quality and regulatory compliance in its offerings.
In other recent news, Hims & Hers Health, Inc. reported significant financial growth with a 77% year-over-year increase in third-quarter sales, surpassing $400 million, and an adjusted EBITDA over $50 million. The company projected Q4 2024 revenue between $465 million and $470 million, marking an 89% to 91% year-over-year increase, with full-year revenue expected to be between $1.46 billion and $1.465 billion. In addition, Hims & Hers announced the appointment of a new independent director, Deb Autor, and plans to launch liraglutide, the first generic GLP-1, in 2025.
On the analyst front, BofA Securities downgraded Hims & Hers from Buy to Underperform due to Amazon (NASDAQ:AMZN)'s entry into key markets. Despite this, TD Cowen reaffirmed its Buy rating on Hims & Hers, while Piper Sandler and Needham raised their price targets, maintaining Neutral and Buy ratings respectively.
The company's future also hinges on potential FDA leadership ties, as suggested by a report from Hunterbrook Media. The report indicates that the company could benefit from President-elect Donald Trump's nominee for the Food and Drug Administration (FDA) commissioner, Dr. Martin Makary, currently an executive at Sesame, a telehealth company that, like Hims & Hers, sells compounded GLP-1 drugs online. Bank of America (NYSE:BAC) analysts noted that the FDA's stance on the compounding of GLP-1 products is crucial as it will determine the ability of companies like Hims & Hers to continue selling these compounded medications.
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