Despite the recent volatility, Needham initiated coverage of Hims & Hers Health ( NYSE: HIMS ) with a buy recommendation on Thursday, highlighting the telehealth company’s prospects beyond GLP-1s. HIMS’ recent upsurge coincided with the launch of its compounded GLP-1s products containing semaglutide, the active ingredient of Novo Nordisk’s ( NVO ) popular weight-loss drugs Ozempic and Wegovy. Despite an over 90% rise this year, the San Francisco, California-based firm has lost ~15% over the past 30 days as Wall Street reacted to its Q2 2024 results, which, however, exceeded estimates and included a guidance raise for 2024.
Attributing HIMS’ increased volatility to the launch of its GLP-1 business, Needham said that it will have a more beneficial effect than a negative impact on the company’s fundamentals. With a $24 target on the stock, the firm said that HIMS, backed by multiple catalysts for growth and margin expansion, has a healthy growth trajectory. Expanding at more than 40% growth with over $1B in revenue, HIMS is not only a GLP-1 story, Needham said, noting the company’s entry into the higher acuity care space and its plans to launch margin-friendly personalized products.
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