Hims & Hers Health: Strategic Expansion Amidst Execution Uncertainties Justifies Hold Rating

In a report released today, Craig Hettenbach from Morgan Stanley maintained a Hold rating on Hims & Hers Health (HIMS – Research Report), with a price target of $40.00.

Craig Hettenbach has given his Hold rating due to a combination of factors surrounding Hims & Hers Health’s strategic moves and market positioning. The company is expanding its platform both organically and through acquisitions, such as the recent purchase of Zava, which is expected to enhance its international reach and capabilities. However, the success of these expansions hinges on effective execution, particularly in translating its direct-to-consumer model to international markets and managing additional acquisitions.
While the acquisition of Zava provides Hims & Hers with a platform compliant with local telemedicine regulations and a presence in multiple countries, there are concerns about how this will impact the company’s growth profile and gross margin mix. The potential for vertical integration and achieving management’s ambitious 2030 revenue and EBITDA targets also remain areas of debate. As such, while the strategic direction is promising, the uncertainties surrounding execution and integration justify a Hold rating at this time.

According to TipRanks, Hettenbach is a 4-star analyst with an average return of 4.1% and a 54.69% success rate.

In another report released yesterday, TD Cowen also reiterated a Hold rating on the stock with a $38.00 price target.