Citi has reaffirmed its Neutral rating and a $20.00 price target for Hims & Hers Health, Inc. (NYSE: HIMS), a telehealth company. The reaffirmation comes amid new developments from pharmaceutical giant Eli Lilly (NYSE:LLY) regarding its diabetes treatment, Zepbound (tirzepatide).
Eli Lilly has made a strategic move to introduce single-dose vials of Zepbound for self-pay patients holding an on-label prescription. A four-week supply is priced at $399 for the 2.5 mg dose and $549 for the 5 mg dose.
The company's decision to offer these vials directly to patients at Lillydirect.com is seen as a measure to ensure patients have access to authentic and safe medication, countering the risks associated with counterfeit or untested products.
The vials are designed for self-administration using a syringe, which is similar to the method used for compounded GLP-1 medications, but notably not with an auto-injector. This approach by Eli Lilly appears to be a competitive response to the compounders in the market, providing patients with an option for a branded drug directly from the manufacturer.
Citi's analysis suggests that while this move by Eli Lilly may not immediately affect Hims & Hers' current offering of compounded Semaglutide, a GLP-1 treatment, it represents an attractive alternative for patients.
These patients may prefer the certainty of a branded medication and are not inclined to engage in multi-month orders to obtain lower prices.
InvestingPro Insights
The recent reaffirmation of a Neutral rating by Citi for Hims & Hers Health, Inc. (NYSE:HIMS) comes at a time when the company's market dynamics are particularly noteworthy. According to InvestingPro data, Hims & Hers boasts a strong revenue growth of 50.15% over the last twelve months as of Q2 2024, with an even higher quarterly revenue growth of 51.82%. These figures suggest a robust expansion in the company's business, which may be a positive signal for investors considering the competitive pressures in the telehealth sector.
InvestingPro Tips reveal that Hims & Hers has been actively buying back shares, indicating management's confidence in the company's value. Additionally, analysts have revised their earnings estimates upwards for the upcoming period, reflecting optimism about the company's financial prospects. With a market capitalization of $3.48 billion and a high return of 135.68% over the past year, Hims & Hers has demonstrated significant investor confidence despite its high P/E ratio of 189.06, which suggests a premium valuation.
For readers interested in a deeper analysis, InvestingPro offers additional tips on Hims & Hers, which can be found at https://www.investing.com/pro/HIMS. These insights may provide further clarity on the company's financial health and investment potential in the context of the evolving pharmaceutical and telehealth markets.
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