Shares of Weight Watchers International, Inc. (WW) saw an upward movement following Galloway Capital Partners' announcement of acquiring a 2.87% stake in the company. The investment firm addressed a letter to CEO Tara Comonte, expressing opposition to any potential Chapter 11 bankruptcy filing, arguing that it is unnecessary given the company's current financial obligations, which aren't due until 2028 and 2029.
Galloway Capital emphasized that Weight Watchers is not facing insolvency and highlighted its determination to defend shareholders' interests should management consider a Chapter 11 filing. They proposed that if management implements a strategic plan to enhance shareholder value and maintain its valuable net operating losses (NOL), results comparable to those of Hims & Hers Health, Inc. (HIMS, Financial) could be achieved, with the latter trading at significantly higher values.
In reaction to these developments, WW shares increased by 12 cents, reaching 26 cents during afternoon trading, reflecting investors’ positive reception of Galloway’s position and advocacy for shareholder value preservation.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Hims & Hers Health Inc (HIMS, Financial) is $44.50 with a high estimate of $85.00 and a low estimate of $22.00. The average target implies an upside of 58.97% from the current price of $27.99. More detailed estimate data can be found on the Hims & Hers Health Inc (HIMS) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Hims & Hers Health Inc's (HIMS, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Hims & Hers Health Inc (HIMS, Financial) in one year is $32.38, suggesting a upside of 15.68% from the current price of $27.99. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Hims & Hers Health Inc (HIMS) Summary page.
HIMS Key Business Developments
Release Date: February 24, 2025
- Revenue: $481 million for Q4 2024; $1.5 billion for the full year 2024, representing 95% and 69% year-over-year growth, respectively.
- Net Income: $26 million for Q4 2024; $126 million for the full year 2024.
- Adjusted EBITDA: $54 million for Q4 2024; $177 million for the full year 2024, with margins over 11% for Q4 and 12% for the year.
- Gross Margin: Declined approximately 2 points quarter-over-quarter, primarily due to scaling and strategic pricing actions.
- Total Subscribers: Increased 45% to over 2.2 million in Q4 2024.
- Monthly Online Average Revenue per Subscriber: Increased 38% year-over-year to $73 in Q4 2024.
- Free Cash Flow: Nearly $60 million in Q4 2024; nearly $200 million for the full year 2024.
- Cash and Short-term Investments: Over $300 million at the end of 2024.
- Marketing as a Percentage of Revenue: 46% in Q4 2024, a 5-point improvement from the prior year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hims & Hers Health Inc (HIMS, Financial) reported a significant year-over-year revenue growth of 95% for the fourth quarter and 69% for the full year 2024, reaching $1.5 billion.
- The company successfully expanded its subscriber base by 45% to over 2.2 million, with over 55% subscribing to at least one personalized solution.
- Hims & Hers Health Inc (HIMS) achieved its first full year of GAAP profitability with a net income of $126 million.
- The company is investing in technology and infrastructure, including whole body lab testing and a peptide facility, to enhance personalized treatment offerings.
- Hims & Hers Health Inc (HIMS) is leveraging AI and data analytics to improve telehealth offerings and patient outcomes, with plans for AI-driven diagnostics and automation.
Negative Points
- Gross margins declined approximately 2 points quarter-over-quarter, primarily due to the scaling of the GLP-1 offering and strategic pricing actions.
- The company anticipates some pressure on gross and adjusted EBITDA margins in the first quarter of 2025 due to strategic pricing actions and marketing investments.
- There is a potential risk of regulatory challenges related to the personalization of GLP-1 dosages, which could impact the company's offerings.
- The transition away from commercially available semaglutide doses may lead to a loss of some subscribers seeking branded options.
- Hims & Hers Health Inc (HIMS) faces challenges in sourcing branded medications reliably, impacting the consistency and transparency of pricing for customers.
