Shares of Hims & Hers Health Inc (NYSE:HIMS) climbed 4% on Wednesday after Canaccord analyst Maria Ripps raised the firms price target on the stock to $40 from $32 and kept a Buy rating.
The analysts revision comes on the heels of a roughly 67% increase in Hims & Hers shares during the second quarter. Canaccord cited the company's early progress shifting from compounded peptides toward branded weight-loss treatments as a factor in the updated outlook.
Executives at partner firms have pointed to Hims & Hers growing telehealth volumes. Jamey Millar, EVP of U.S. operations at Novo, characterized Hims as one of Novos most "voluminous" telehealth partners, a remark noted by the analyst in assessing channel strength.
Recent operational milestones
- Hims & Hers launched generic semaglutide for Canadian customers in late May.
- The company completed its acquisition of Eucalyptus in early June.
Canaccord highlighted improving consumer payment trends as additional evidence of momentum. According to the analyst, adjusted year-over-year sales measured via credit card data climbed through the quarter - moving from mid- to high-single-digit gains in April to high-teen growth in June.
Regulatory developments and upcoming reviews
The Pharmacy Compounding Advisory Committee has been asked to review a subset of peptides: seven of the twelve peptides referred are scheduled for discussion on July 23-24. The Food and Drug Administration has advised against permitting compounding pharmacies to legally manufacture these peptides. The agency has also added eight new panelists to the committee, the majority of whom are involved with businesses that promote or prescribe peptides.
Those regulatory items are part of the backdrop to the analysts reassessment and introduce a near-term set of decisions that market participants will be watching closely.
What this means going forward
The combination of a higher price target, recent product and M&A activity, and improving card-sales data underpins the positive tone of the analyst note that drove the intraday share move. At the same time, the scheduled advisory committee review and the FDAs prior recommendation against compounding manufacture of certain peptides present an active regulatory calendar that could affect future availability and distribution dynamics.
Investors and observers should track the July advisory meeting and subsequent regulatory commentary for clarity on how compounding and branded pathways will coexist or diverge in the market.