As a player in the growing telehealth sector, Hims & Hers Health (HIMS) has grown significantly, driving its stock up over 208% in the past year. The company’s recent highlights include the introduction of a GLP-1 injection designed to compete with Novo Nordisk’s (NVO) big guns (Ozempic and Wegovy), a strong earnings growth forecast, and a distinct initiative aimed at providing cost-effective weight loss solutions to targeted groups. Most recently, the company achieved notable second-quarter results, surpassing analysts’ earnings per share and revenue expectations.
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Despite possible regulatory constraints and potentially resurgent GLP-1 competition from Eli Lily (LLY), Hims & Hers anticipates sustained revenue growth and profitability, making HIMS an attractive option in a rapidly growing market.
Hims & Hers Launch Service Appreciation Initiative
Hims & Hers Health is a global telehealth firm that provides a platform connecting consumers to licensed healthcare professionals. It operates in the United States, the United Kingdom, and other international locations.
The company’s product offerings range from prescription and over-the-counter medications to cosmetics and supplements. HIMS has also expanded into specialized products such as melatonin and biotin for wellness, skincare essentials, and sexual health products. In addition, the company provides medical consultation, post-consultation support services, and health and wellness products through its wholesale partners.
The World Health Organization estimates that about 70% of American adults are overweight or have obesity. Due to health issues related to obesity, at least 2.8 million deaths occur each year. In response, the company has recently launched an initiative to reduce barriers to safe, affordable healthcare by offering access to a common compounded GLP-1 subscription for weight loss treatment to eligible U.S. military, veterans, teachers, nurses, and first responders for as low as $99 a month.
Hims & Hers has reported that its weight loss customers have lost an average of 10.2 pounds while on compounded GLP-1 injections and 6.3 pounds while on non-GLP-1 compounded oral medication kits, alongside a balanced diet and exercise.
Hims & Hers’ Recent Financial Results & Outlook
The company recently reported results for Q2 2024. Revenue of $315.65 million marked a 52% year-over-year increase while beating analysts’ expectations of $298.69 million. The firm also moved from a net loss of $7.2 million in Q2 2023 to a positive net income of $13.3 million. Other financial highlights include an increase in adjusted EBITDA from $10.6 million in Q2 2023 to $39.3 million and a substantial increase in free cash flow from $10 million in Q2 2023 to $47.6 million. Earnings per share (EPS) were $0.06, exceeding consensus projections of $0.04.
Following second- quarter’s positive results, HIMS’ management has issued guidance for Q3 2024, with revenues estimated to be $375 million to $380 million, while the adjusted EBITDA is projected to be in the range of $35 million to $40 million, translating to an adjusted EBITDA margin between 9% to 11%. Furthermore, management anticipates annual revenue to be between $1.37 billion and $1.4 billion. The adjusted EBITDA for the entire year is estimated to be between $140 million and $155 million, which suggests an adjusted EBITDA margin of approximately 10% to 11%.
What Is the Price Target for HIMS Stock?
The stock has been upward trending, climbing roughly 140% over the past three years. It trades in the upper half of its 52-week price range of $5.65 – $25.74 and shows positive price momentum by trading above its 20-day (17.15) and 50-day (17.14) moving averages. With a P/S ratio of 4.0x compared to the Household & Personal Products industry average of 3.1x, the stock trades at a premium, likely reflecting its growth potential.
Analysts following the company have been cautiously optimistic about the stock. Hims & Hers Health is rated a Moderate Buy based on 12 analysts’ cumulative recommendations. The average price target for HIMS stock is $21.18, representing a potential upside of 8.95% from current levels.
See more HIMS analysts ratings
HIMS in Summary
Hims & Hers continues to make transformative strides. Driving this growth is the company’s robust earnings forecast, new product introductions such as the GLP-1 injection that competes with market leaders, and targeted initiatives for cost-effective weight loss solutions. This innovation and its wide array of wellness products and services make Hims & Hers an attractive investment opportunity in the fast-paced telehealth sector.
