BofA raises Hims and Hers stock price target to $37 on growth

BofA raised Hims & Hers’ price target to $37 from $36 (Neutral) while warning that retention of new oral Wegovy members may be softer, making a second-half EBITDA ramp hard to achieve. The note also points to pricing churn risk as the subscription fee rises from $39 in month 1 to $149 in month 2, with initial customer growth appearing to plateau at competitor Ro. Other analysts also lifted targets (Canaccord to $40, Barclays to $39) as GLP-1/branded weight-loss momentum continues, though valuation remains rich (roughly 34.5x CY26 EV/EBITDA).

Analysis

HIMS is still trading like a growth platform even though the current setup looks more like a subscription-funnel test with a harsh second-month conversion hurdle. The key market mechanism is not initial demand, but whether enough users accept the price step-up to justify a durable LTV/CAC framework; if not, the company is left with high acquisition spend, weak payback, and a valuation that has to re-rate toward consumer-subscription peers rather than software-like multiples.

The competitive read-through matters more than the headline target moves. If Ro is already showing the classic post-launch plateau, that suggests oral GLP-1 demand may be front-loaded across telehealth channels rather than a structural share gain, which would cap HIMS’s ability to keep compounding cohorts. Conversely, NVO is the cleaner beneficiary because it monetizes the category expansion without bearing the churn risk, and any incremental telehealth channel volume still flows back to branded drug economics even if HIMS’s equity story disappoints.

Near term, the stock can still squeeze higher on analyst upgrades and traffic data, but the next 1-3 months should be defined by whether retention cohorts stabilize after the promotional period. If third-party card data or management commentary shows the expected churn, the market will likely punish the implied second-half EBITDA ramp first, then compress the multiple second. Over 6-18 months, this is a business-model question: if HIMS cannot convert trial into durable membership, the current premium valuation becomes hard to defend.

The contrarian point is that the market may be underestimating how useful oral GLP-1 access is as a top-of-funnel for the broader HIMS ecosystem. If even a modest fraction of users migrate into higher-margin chronic-care or branded weight-loss pathways, the current skepticism will look too aggressive. That said, the burden of proof is now on retention data, not analyst targets; price action above $36-37 without confirming cohort durability looks more like a multiple extension than fundamental validation.

Key Decisions for Investors

• Short HIMS on strength into the $36-37 area; thesis is that current valuation already discounts a best-case GLP-1 outcome, while retention data suggest the second-half EBITDA ramp is vulnerable. Use a 1-3 month horizon and cover if cohort data or guidance indicate sustained month-2 conversion; initial downside target is a high-20s multiple normalization.
• If you want to express the same view with defined risk, buy HIMS 2-4 month puts or put spreads after any post-upgrade squeeze; the best entry is on low-volatility drift higher, not on a capitulation day. Falsifier: evidence that subscriber retention holds through the pricing cliff and management raises full-year EBITDA guidance.
• Pair long NVO / short HIMS for a cleaner GLP-1 exposure: long the manufacturer that captures category growth, short the distributor with the highest churn and multiple risk. This should work best if market checks show oral demand is real but transitory at the telehealth layer.
• Set an alert around third-party monthly cohort data and management commentary on paid conversion; if month-2 retention improves materially, abandon the short. If it does not, expect analyst enthusiasm to fade faster than the stock multiple, particularly given the gap between LTM EBITDA and the current enterprise value.