Hims & Hers Health Analyst Sees Buying Opportunity Following Steep Selloff: 'We See No Reason To Change Our View'

Hims & Hers Health Inc. HIMS shares dropped sharply after the company reported its fourth-quarter earnings.

What To Know: Hims & Hers posted fourth-quarter earnings of 11 cents per share, matching analyst estimates. Revenue came in at $481.14 million, beating the consensus estimate of $470.31 million and nearly doubling the $246.62 million reported in the same quarter last year. The company's subscriber base grew to 2.2 million, a 45% increase year-over-year but its gross margin dropped to 77% from 83% in fourth-quarter 2023.

Despite the stock’s decline, Needham analyst Ryan MacDonald reiterated a Buy rating and raised his price target to $61. He pointed to strong fourth-quarter results and a promising outlook for 2025, driven by growth in the company's weight-loss business. MacDonald acknowledged that Hims & Hers shares had sold off after the FDA announced the end of a semaglutide shortage, which could impact short-term revenue from weight-loss treatments. However, he expects the company to generate $725 million from its weight-loss segment in 2025, up from $225 million in 2024.

MacDonald emphasized that the company's core business remains strong, with online revenue up 98.3% year-over-year. He said subscriber growth and increased average revenue per user (ARPU) indicate long-term potential, especially as Hims & Hers expands its multi-condition treatment offerings. Management expects approximately 30% of its 2025 revenue to come from the weight-loss business, up from 15% in 2024 and will discontinue commercially available semaglutide products after the first quarter.

Hims & Hers provided a full-year 2025 revenue forecast of $2.3 billion to $2.4 billion, representing 59.2% growth at the midpoint. Adjusted EBITDA guidance came in at $270 million to $320 million, with margins projected between 12% and 13%. MacDonald's updated price target values Hims & Hers at an enterprise value-to-sales multiple of 6.5 times his 2025 estimates.

HIMS Price Action: Hims & Hers Health shares are down 21.6% at $40.10 at the time of writing, according to Benzinga Pro.

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