Hims & Hers Health (HIMS) saw its share price fall in today’s trading session after BofA Securities released an analyst note. The note suggested that the healthcare company’s Q4 revenue results might come in lower than expected. 4.3-star analyst Allen Lutz now projects Q4 revenue to land between $435M and $447M after looking at data from Bloomberg Second Measure, which analyzes transaction data that offers insights into company performance and consumer trends in real time.
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This projection is below the analyst consensus estimate of $469.68M. Lutz, who has an underperform rating and $18 price target on the stock, noted that Hims & Hers has consistently met its quarterly revenue estimates in the past. However, he expects core revenue growth from GLP-1 weight-loss medications to slow down from 47-50% in Q3 to around 43% in Q4.
Lutz is also concerned about the potential impact of the FDA’s decision, which stated that the shortage issue with Eli Lilly’s (LLY) GLP-1 medication, Zepbound, has been resolved. Indeed, this could pose a risk to compounded semaglutide, a customized version of the medication similar to Novo Nordisk’s (NVO) Wegovy. Compounded semaglutide has been used as an alternative to branded GLP-1 medications, but its use may decline as the shortage of branded medications is resolved. Lutz expects compounded semaglutide to eventually exit the market, potentially by 2025.
Is Hims and Hers Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HIMS stock based on six Buys, six Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 223% rally in its share price over the past year, the average HIMS price target of $27.77 per share implies that shares are almost fairly priced.
