Top Analyst Initiates BUY on HIMS Stock! Massive Upside Ahead?

Summary

Analyst Ryan McDonald initiates coverage on telehealth company Hims & Hers, assigning a buy rating and a $24 price target. The company shows strong growth with a 52% increase in revenue and a 43% rise in subscribers. Despite volatility due to entry into the GLP-1 market, the analyst anticipates a positive impact on fundamentals. Hims & Hers is expanding its pharmacy infrastructure to support GLP-1 products and is investing in automation for product diversification. The company is expected to benefit from the booming weight loss market, with the analyst projecting significant growth potential beyond current valuations.

Takeaways

• 📈 Hims & Hers Health (HIM) is trending on the website Trends, indicating effective marketing.
• 💹 HIM stock is trading at $16.46 with a PE ratio of 25.75, which is high but justified due to the company's recent profitability.
• 💼 HIM has become consistently profitable, earning around 11 to 12 million per quarter, a significant factor in the increasing PE ratio.
• 🚀 The company's forward PE is 49, reflecting the rapid growth and profitability.
• 📊 Revenues are growing exponentially, with the most recent quarter showing a 52% increase year-over-year.
• 💊 HIM is investing in expanding its Pharmacy infrastructure to better support GLP-1 products and enhance the supply chain.
• 💼 Analyst Ryan McDonald initiated coverage on HIM with a buy rating and a price target of $24, nearly 50% higher than the current price.
• 📉 Despite volatility, the analyst anticipates a positive impact on HIM's fundamentals due to its entry into the GLP-1 market.
• 💸 HIM's Q2 earnings beat analyst estimates, and the company expects a significant QoQ increase in revenue for Q3.
• 🔮 The average analyst price target for HIM is $22.21, while the speaker's price target is over $42, indicating a belief in significant undervaluation.

Q & A

What is the current trend status for Hims according to the transcript?

Hims is trending, which indicates that their marketing efforts are working effectively.

What is the recent stock price and PE ratio for Hims mentioned in the transcript?

The stock is recently trading at $16.46 with a PE ratio of 25.75.

Why has Hims' PE ratio increased?

Hims has recently become profitable, which typically causes the PE ratio to shrink substantially fast, especially for newly profitable companies.

What is the forward PE ratio for Hims and what does it signify?

The forward PE ratio for Hims is 49, indicating an expectation of future profitability and growth.

What is the significance of Hims being profitable and its impact on the stock?

Hims being profitable is significant as it's the reason for the rapid increase in the PE ratio and is a positive indicator for investors.

What was the revenue growth and adjusted EBITDA increase in the most recent quarter for Hims?

In the most recent quarter, Hims' revenue grew by 52% and adjusted EBITDA increased by 270%.

When did the analyst purchase most of their Hims shares according to the transcript?

The analyst purchased most of their Hims shares around the red circle area on the stock chart, before the earnings report was released.

What is the analyst's price target for Hims and how does it compare to the current price?

The analyst's price target for Hims is $42, which is significantly higher than the current price.

What is the analyst's view on Hims' growth potential in the weight loss market?

The analyst sees a major growth opportunity for Hims in the booming weight loss market, with a price target of $24, nearly 50% higher than the current price.

What is the analyst's expectation for Hims' financial performance in FY 24 and FY 25?

The analyst expects Hims to have an EBITDA of $147 million in FY 24 and $233 million in FY 25.

What is the FDA's current stance on compounding semi-glutide drugs when in shortage?

As of May 2023, the FDA allows compounding of semi-glutide drugs when they are in shortage, provided certain requirements are met.