Recently, Hims & Hers Health (NYSE:HIMS) posted its latest earnings report, and the consumer-focused telehealth company delivered some impressive numbers for its first quarter. Not only did it manage to beat Wall Street expectations, but it also beat its own guidance substantially. The released numbers and new guidance gave HIMS stock a surge of 12.2% in trading on Friday amid somewhat higher volume than normal. Though the company lost some of those gains going into trading today, these points gave analysts a new confidence, as reflected in some recent changes.
Earnings So Good They Beat Even The Company's Expectations
Hims & Hers Health delivered a terrific quarter in revenue, bringing in $52 million in revenue for the first quarter of 2021. With the company's expectations set in the $48 million to $50 million range, as established back in the fourth quarter, the revelation of a win against its own expectations was welcome news. Better yet, the Zacks consensus looked for $48.74 million, so the company also beat consensus earnings as well.
Earnings, meanwhile, posted a loss, but a loss that turned out to be a win. The company reported a net loss of $51 million for the quarter, or $0.14 on an earnings per share (EPS) basis. That might sound like a disaster, especially given that the company posted a loss of $6 million for the first quarter of 2021. However, given that the Zacks consensus called for a loss of $0.15 per share, that number still turned out to represent a win. Reports note that the losses this time around were largely connected to a recent merger with Oaktree Acquisition Corp., as Hims & Hers Health needed to offer largely stock-based compensation and some transaction bonuses accordingly.
Looking at the company's earnings before interest, taxes, depreciation and amortization (EBITDA) is a better picture. The company turned in an EBITDA loss of $8.6 million against the first quarter of 2020's $4.6 million, and the company was expecting an EBITDA loss of between $9.5 million and $11.5 million.
The company also rolled out second-quarter earnings guidance earlier today, calling for a further increase over last quarter's figures. The company expects revenue between $55 million and $57 million for the quarter. That's an excellent comparison against analyst consensus, which is looking for $50.23 million this quarter.
What Do Financial Analysts Think About HIMS Stock?
The picture from the financial analyst sector, as revealed by our latest research, is increasingly bullish toward the company, if slowly, and narrowly. HIMS stock spent the early part of this year in a “buy” consensus, before shifting to a “hold” around April and then shifting back to a “buy”.
Back in February, after the company went public in January that valued the company at close to $1.6 billion, Hims & Hers Health stock had two “buy” ratings and one “hold” to its credit. In April, that shifted to “hold”, by posting three “buy” ratings and four “hold” ratings. This month, however, a new “buy” rating stepped in to bring the company to four and four, pulling the consensus back toward “buy.”
The HIMS price target, meanwhile, is in a very narrow range. The current high of $20 and the low of $12 bookend an average target of $16.33. Given that Hims & Hers Health stock currently trades at $12.06, there's clearly some upside potential afoot.
The recent activity is especially positive for HIMS stock; on Thursday, Credit Suisse upgraded the company from “neutral” to “outperform,” though it left the price target at $16. Citigroup, meanwhile, upgraded its price target from $16 to that new high of $20 just a day prior, illustrating that changing wave of sentiment for the company discussed previously.
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