A Snapshot of Hims & Hers Health Stock Performances and Challenges
Taking a Gander at Hims & Hers Stock Performance
Stock surge of Hims & Hers on Monday
Hims & Hers Health, the telehealth platform specializing in men's and women's health, has seen its stocks surge by 2.2% in the current market, thanks to a positive analysis by Morgan Stanley. However, this optimistic surge may not last forever.
Glancing at the Numbers
In 2024, Hims & Hers reported a whopping 69% revenue increase, hitting $1.48 billion with a net income of $126 million and an adjusted EBITDA of $177 million. For 2025, the company envisions revenue between $2.3 billion and $2.4 billion, demonstrating a continued growth trajectory [1][2].
Setting Sail With the Hers App
Data from Morgan Stanley suggests that the majority of downloads for Hims & Hers apps in February 2023 were for the Hers app, hinting at a significant new customer growth from the female demographic. This boost was likely due to advertising during a well-known sporting event that month [1].
Gray Skies Ahead: The FDA's Decision
However, the Federal Drug Administration (FDA) declared that semaglutide, a weight loss drug Hims & Hers markets as a cheaper alternative to competitors like Novo Nordisk and Eli Lilly, is no longer in short supply. Consequently, compounding of semaglutide will no longer be authorized. This decision has sparked investor concerns, posing a potential threat to Hims & Hers' weight loss business [1].
Morgan Stanley's Take
Craig Hettenbach, analyst at Morgan Stanley, expressed optimism in his note about the 47% increase in app downloads. Despite keeping his $60 price target, Hettenbach declined to upgrade the stock and maintained the "equal weight" rating. At present, Hims & Hers stock trades at 62 times earnings, and a rise to $60 would quadruple its P/E ratio, seeming somewhat unlikely [1].
Steering Through the Storm
Given the analyst's cautious stance and the FDA's decision to halt compounding of semaglutide, it seems prudent to tread carefully when considering investments in Hims & Hers Health stock. Despite its impressive financial growth and expanding subscriber base, the company faces challenges from the rapidly evolving GLP-1 market and potential market saturation.
[1] - Morgan Stanley Research Note (Accessible to clients only)[2] - Hims & Hers 2024 Annual Report[3] - Bloomberg Financial Forecasts (Subscription Required)
- To maintain a profitable investment in Hims & Hers Health stock, it's likely important to consider the potential impact of the FDA's decision on their weight loss business.
- Craig Hettenbach, analyst at Morgan Stanley, suggests that while the Hers app has seen a significant increase in downloads, a rise in the company's stock price to $60 might be unlikely, given its current high P/E ratio.
- Investors may find it wise to focus on the GLP-1 market and potential market saturation as challenges that Hims & Hers Health might face in the future.
- With the FDA's decision on semaglutide and Morgan Stanley's cautious stance on Hims & Hers Health stock, investors might consider opportunities in other finance-related apps or sectors for their investing money.
