Yahoo Finance Jefferies downgrades Hims & Hers Health on growth concerns
Jefferies has downgraded Hims & Hers Health (HIMS) to Hold from Buy, lowering its price target to $15. The analysts behind the call say expectations have now caught up to reality, limiting potential upside for the company’s numbers.
Julie Hyman and Josh Lipton break down the details, questioning whether there are other categories where Hims & Hers would benefit from virtual subscribing, beyond hair loss and erectile dysfunction.
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This article was written by Gabriel Roy.
Video transcript
- Jeffries downgrading Hims & Hers Health to hold lowering its price target to $15. So this one, Julie, Jeffries, a downgrade the stock and basically their point is listen they say expectations now at a more appropriate level in their words. The analysts saying execution. He says has been stellar here. Says the company has generated impressive revenue growth, though emphasizing growth is slowing.
He says, it seems, just in large part he think that's due to just the large of law numbers kicking in. Say expectations have now caught up to reality, limiting potential upside to numbers.
- Right. On that last point, basically, the analysts looked at past history. And going into earnings, they said estimates have tended to be low. And so it's an unusual situation that estimates are already in line sort with what this particular analyst thinks is going to happen with the company. And that the analysts, by the way, is Glenn Santangelo.
The other interesting thing I thought about this call is that Hims & Hers is basically effectively a new age mail order pharmaceutical business, right? It's an online pharmaceutical business.
- Hair loss, dermatology, behavioral health.
- Exactly. Hair loss and erectile dysfunction, which the analyst points to as the two most successful areas for the company, are sort of uniquely suited to I get my prescription online I meet with the doctor online because those are potentially people like to keep them quiet. And he's questioning whether there is a big potential for other categories that are so perfectly suited to what Hims & Hers does, which I think is interesting because it's a more existential question for the company than just sort of the quarterly buy.
- Yeah, to your point, he points out that they have expanded to a new kind of therapeutic category as he points out. But he's just, I guess, he's saying the incremental unicorn categories to him less obvious moving ahead.
- Right. I just thought it was quite kind of interesting here.
