On Tuesday, Leerink Partners maintained a “Market Perform” rating on Hims & Hers Health, Inc. (NYSE: HIMS), setting a target price of $40.00. The firm’s analyst discussed the recent addition of two new products to the company’s weight loss portfolio: Eli Lilly’s (NYSE: LLY) Zepbound and a generic version of liraglutide. While the inclusion of Zepbound was unexpected, the move is seen as an effort by Hims & Hers to broaden its customer base.
However, the analyst raised concerns about the high cost of Zepbound, priced at $1,899 per month, which could impact demand. As the drug becomes more widely available through online prescription channels, its price might deter some potential customers. Leerink Partners has opted for a cautious stance, waiting to see how the market responds to Zepbound sold through Hims & Hers.
The analyst also pointed out that, although expanding its product range is a positive step, it’s crucial to assess the long-term potential of Hims & Hers’ weight loss segment. Despite the new offerings, the company’s core business valuation is considered fair at current levels. Leerink Partners intends to wait for more evidence of the company’s performance in the competitive weight loss market before making any changes to its position.
Hims & Hers Health, Inc., known for its presence in the growing telehealth and wellness industry, continues to diversify its offerings. The company’s strategy centers on reaching customers through online channels, providing discreet and convenient health solutions.
Investors will likely keep a close eye on Hims & Hers’ ability to expand its product offerings and secure market share in the digital health space. The company’s success in attracting and retaining customers will be critical to its financial performance and stock value, especially with the introduction of new products like Zepbound.
In other recent developments, Hims & Hers announced plans to sell Eli Lilly’s diabetes and weight-loss drug Zepbound through its telehealth platform, marking a significant expansion of its pharmaceutical offerings. However, BofA Securities maintained an “Underperform” rating on the company, with a price target of $22.00. While acknowledging the expanded product line, the firm expressed skepticism about the impact on sales due to the lower margins associated with branded drugs.
Sales data from February, provided by Bloomberg Second Measure, showed a 124% year-over-year growth in GLP-1 sales, suggesting potential upside to market estimates. However, BofA Securities warned of possible slower growth in core areas, citing risks tied to the company’s reliance on semaglutide, which accounts for nearly half of its sales. For the first quarter of 2025, Hims & Hers expects online revenue to range from $594 million to $622 million, surpassing the Visible Alpha consensus of $523.9 million. This marks a significant year-over-year growth of 122% to 132%, though the company anticipates more modest growth when excluding weight loss products.
As Hims & Hers continues to diversify its product range, market analysts will be watching closely to gauge the impact of these developments on the company’s financial performance.
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