Jefferies cuts Hims and Hers stock rating to hold, lowers target by 12% By Investing.com
Tuesday – Jefferies has downgraded shares of Hims and Hers Health, Inc. (NYSE:HIMS) from Buy to Hold, adjusting the price target to $15 from the previous $17. The firm’s decision comes amid considerations of market concerns that have persisted since the company’s initial public offering.
These concerns include the barriers to entry in the market, the sustainability of growth, pricing strategies, and the effectiveness of marketing expenditures.
Since its IPO, Hims and Hers has seen its share price increase by approximately 50% year-to-date. Jefferies acknowledges that the company has been successful in executing its business strategies across various fronts. The analyst from Jefferies noted that the company’s expenses are now more aligned with its share price performance.
The adjustment in rating reflects a shift in perspective based on the company’s current market position. With the growth rate slowing down, the investment case for Hims and Hers is deemed to be more clearly understood by the market, leading to the revised Hold rating.
The new price target of $15 represents a decrease from the earlier $17 target set by Jefferies. This change in the price target is a direct response to the reassessment of the company’s growth trajectory and market dynamics.
Jefferies’ evaluation indicates that while Hims and Hers has managed to address several critical concerns post-IPO, the slowing growth and the current level of expenses justify a more cautious outlook on the stock’s future performance.
InvestingPro Insights
In light of Jefferies’ recent downgrade of Hims and Hers Health, Inc. (NYSE:HIMS) stock from Buy to Hold, real-time data and insights from InvestingPro provide additional context for investors. According to InvestingPro, Hims and Hers is experiencing significant revenue growth, with a 65.49% increase in the last twelve months as of Q4 2023. This aligns with the company’s strong return over the last three months, which has been reported at 75.89%. Moreover, analysts predict that the company will be profitable this year, which may reflect positively on the stock’s future performance despite current market concerns.
However, the company is trading at a high Price / Book multiple of 9.27, which suggests that the market may be valuing the company’s assets quite generously. Additionally, the company’s P/E ratio stands at -118.75, indicating that it may not yet be profitable over the last twelve months. Investors should consider these metrics alongside the strong revenue growth and the potential for future profitability.
For those looking to delve deeper into the company’s financial health and stock performance, InvestingPro offers a range of additional insights. There are several more InvestingPro Tips available to help investors make more informed decisions. To access these valuable insights, visit InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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