SVB Securities Sees 26% Downside In This Telehealth Platform

SVB Securities analyst Joy Zhang initiated coverage on Hims & Hers Health Inc HIMS with an Underperform rating and set a price target of $4 (26% downside).
HIMS operates as a DTC diagnosis to the delivery platform, providing treatments for historically stigmatized chronic conditions like ED and hair loss.
The analyst said with its 100% cash pay model, HIMS's success depends on millennial/gen Z consumers' willingness to pay for convenience and a premium experience.
Zhang added that while the model has worked well under a favorable market backdrop of healthy consumer spending trends, it is risky in an economic downturn.
He sees downside risk to the company's FY22 and out-year guidance with no recession assumptions included in the outlook.
Further, the analyst thinks HIMS' consumer behavior of paying out of pocket can flourish only under high disposable income and stable macroeconomic conditions.
Price Action: HIMS shares are trading higher by 1.01% at $5.49 on the last check Friday.

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