New Forecasts: Here's What Analysts Think The Future Holds For Hims & Hers Health, Inc. (NYSE:HIMS)

By
Simply Wall St
Published
August 16, 2021
NYSE:HIMS
Source: Shutterstock

Shareholders in Hims & Hers Health, Inc. (NYSE:HIMS) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the latest consensus from Hims & Hers Health's four analysts is for revenues of US$254m in 2021, which would reflect a huge 30% improvement in sales compared to the last 12 months. Losses are expected to increase substantially, hitting US$0.55 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$227m and losses of US$0.60 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for Hims & Hers Health

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NYSE:HIMS Earnings and Revenue Growth August 17th 2021

The consensus price target fell 11%, to US$12.25, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Hims & Hers Health at US$14.00 per share, while the most bearish prices it at US$10.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Hims & Hers Health'shistorical trends, as the 68% annualised revenue growth to the end of 2021 is roughly in line with the 74% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.3% per year. So although Hims & Hers Health is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Hims & Hers Health is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Hims & Hers Health's future valuation. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Hims & Hers Health.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Hims & Hers Health analysts - going out to 2023, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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