Key Takeaways:
Hims & Hers Health shares surged 9% after Canaccord Genuity raised its price target to $40, citing weight-loss momentum and peptide opportunity.
"Hims is showing accelerating fundamentals with 33% revenue growth and a credible weight-loss distribution channel through Novo Nordisk," Maria Ripps, analyst at Canaccord Genuity, said in a note. She maintained a Buy rating while lifting the target from $32.
The new target implies about 5% upside from Wednesday's close of $37.97, giving the company a market value of $8.66 billion. The stock gained roughly 67% in the second quarter. Credit card spending data showed adjusted year-over-year sales growth improving from mid-to-high single digits in April to the high teens by June, according to Canaccord.
The upgrade comes ahead of a July 23-24 FDA advisory committee meeting that will review seven peptides, including several tied to Hims' strategy. FDA staff recommended against allowing compounding pharmacies to manufacture the peptides, citing limited evidence and unresolved safety concerns. Needham analyst Ryan MacDonald described the recommendation as unexpected but said "this is not the end of the conversation," noting that Health Secretary Robert F. Kennedy Jr. has publicly supported peptide deregulation.
Hims has positioned itself for a potential expansion into peptide therapies. The company acquired a California-based peptide manufacturing facility earlier this year and has become one of Novo Nordisk's largest telehealth partners for weight-loss drugs. Hims launched generic semaglutide in Canada in late May and completed its acquisition of Eucalyptus in early June.
The company reported first-quarter revenue of $608.1 million, up 4% from a year earlier, with 2.584 million subscribers. Gross margin narrowed to 65% from 73% as the company shifted toward branded drugs. Hims posted a net loss of $92.1 million after being profitable in the prior-year period. For the second quarter, management guided revenue between $680 million and $700 million, with adjusted EBITDA of $35 million to $55 million.
The FDA advisory meeting represents the next major catalyst for Hims. Analysts see the peptide market as a potential multibillion-dollar revenue opportunity if regulations become more favorable. The consensus price target among analysts tracked by TipRanks stands at $30.05, below the current trading level, suggesting Ripps' bullish view remains a minority position on Wall Street.
This article is for informational purposes only and does not constitute investment advice.
