On Tuesday, Piper Sandler showed a positive outlook on Hims and Hers Health, Inc. (NYSE: HIMS), raising the company's price target to $13.00 from the previous $11.00. The firm maintained a Neutral rating on the stock, despite acknowledging the company's strong performance in the first quarter.
The health and wellness brand, known for its direct-to-consumer telehealth services, has demonstrated impressive subscriber growth and efficient spending. These factors have contributed to the company achieving double-digit adjusted EBITDA percentages.
The analyst from Piper Sandler noted the strength of the quarter but also expressed caution, suggesting that if Hims and Hers does not maintain its top-line momentum, the margin progression could be at risk.
While the company's entry into new categories, such as GLP-1 treatments, could offer some upside, the analyst indicated that there is not enough information yet to assess the performance of these new ventures. Concerns were also raised regarding the retention of subscribers and the conversion of customers in the long term, especially as the company moves into new and larger total addressable markets (TAMs).
The analyst concluded that while the potential rewards for Hims and Hers are appealing, the risks remain high. The updated price target reflects a cautious optimism, with the firm staying neutral on the stock but acknowledging the company's recent progress.
InvestingPro Insights
As Hims and Hers Health, Inc. (NYSE: HIMS) navigates its growth trajectory, key financial indicators from InvestingPro provide a snapshot of the company's performance. The market cap of HIMS stands at an adjusted $2.5 billion, reflecting its scale in the telehealth market. Additionally, the company has seen a significant revenue growth of 65.49% over the last twelve months as of Q1 2023, indicating a robust expansion in its business operations. Despite the impressive top-line growth, the company's P/E ratio remains negative at -121.49, underscoring the current lack of profitability.
From the InvestingPro Tips, two insights stand out for investors considering HIMS stock. Firstly, the company holds more cash than debt on its balance sheet, suggesting a strong liquidity position that could support future growth or weather economic downturns. Secondly, the Relative Strength Index (RSI) indicates that the stock is in oversold territory, which could imply a potential rebound in the stock price if market sentiment shifts.
For investors looking to delve deeper into Hims and Hers Health, Inc., there are 11 additional InvestingPro Tips available at https://www.investing.com/pro/HIMS. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more insights to inform your investment decisions.
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