Analyst Allen Lutz from Bank of America Securities maintained a Sell rating on Hims & Hers Health (HIMS – Research Report) and keeping the price target at $22.00.
Allen Lutz has given his Sell rating due to a combination of factors related to Hims & Hers Health’s recent business decisions and market conditions. The company announced the addition of Eli Lilly’s branded drug Zepbound and generic liraglutide to its platform, but Lutz does not anticipate significant sales from these offerings. The margins for selling branded drugs like Zepbound are expected to be low, around 2-4%, which is substantially less than the company’s current gross margins of approximately 80%.
Furthermore, the price point for Zepbound on HIMS’ platform is considerably higher than the LillyDirect price, making it unlikely that consumers would choose to purchase it through HIMS. While the introduction of generic liraglutide could be more relevant, its commercial success has been limited due to less favorable outcomes and side effects compared to newer alternatives. Lutz maintains an Underperform rating with a price objective of $22, viewing the recent developments as having minimal impact on the company’s overall financial performance.
HIMS’s price has also changed dramatically for the past six months – from $19.310 to $31.050, which is a 60.80% increase.