Stock decline for Hims & Hers on Tuesday
Slide in Hims & Hers Health Stock 📉Taking a 7.4% dip by 11:10 a.m. ET today, Hims & Hers Health stock ain't looking too hot after an unfortunate move by Bank of America.
Bank of America upped its price target on the pharmaceutical stock, but here's the kicker—it only added a measly dollar to its new target, bringing it to a paltry $22 a share. GUESS WHOSE STOCK IS WORTH MORE THAN THAT RIGHT NOW? Yep, you've guessed it—Hims & Hers! So much for a positive boost.
Bank of America's Perspective on Hims & Hers
In case you're wondering what Bank of America's deal is, they still think Hims & Hers stock is a dog, or as they put it, an "underperform." Elucidating their reasoning in a morning note on The Fly, Bank of America highlighted that GLP-1 sales are clocking in some serious gains, seeing a 124% boost year-over-year in February, accounting for a whopping 45% of Hims & Hers' total revenue that month. Impressive, but apparently not enough to make 'em wanna buy the stock.
Why not, you ask? Well, Bank of America keeps it vague, but if you've been following my take yesterday, the February sales surge had more to do with Hims & Hers' intense Super Bowl advertising than any hard data. And now that the FDA's crackin' down on GLP-1 deficits and phasing out the need for compounded versions of patented drugs like those from Eli Lilly and Novo Nordisk, Hims & Hers' party's over.
What's Going Down with Hims & Hers Health Stock?
Long story short, the gravy train's left the station for Hims & Hers. The windfall profits they've been basking in? Gone. That's gonna create a headwind for future growth.
Now's the time to ask—is Hims & Hers stock at around 65x trailing earnings still worth a grab if growth's headed south? Bank of America doesn't seem to think so, at least not at the current price. But if Hims & Hers' stock price drops to the low $20s, well, maybe they'll rethink it.
[1] Source: Bank of America Global Research[2] Source: The Fly[3] Source: Seeking Alpha[4] Source: FDA.gov[5] Source: Forbes
- Bank of America, despite increasing its price target for Hims & Hers Health stock by a mere dollar, still considers it an 'underperform'.
- The pharmaceutical company's stock is currently valued higher than Bank of America's new target price of $22 a share.
- In a morning note on The Fly, Bank of America cites a 124% increase in GLP-1 sales in February, accounting for 45% of Hims & Hers' total revenue that month, as a reason for its 'underperform' declaration.
- However, Bank of America believes the surge in February's sales was due to Hims & Hers' intense Super Bowl advertising and not hard data, and suggests that the FDA's crackdown on GLP-1 deficits and the phasing out of compounded versions of patented drugs could negatively impact Hims & Hers' stock's future growth.
