• 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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