By Hims & Hers stock price has surged and is nearing its all-time high as investors bet that its strong momentum will continue in the coming years. HIMS shares surged by almost 16% on Tuesday, reaching its highest level since February. It is just a few points below its all-time high of $72.37.
Hims & Hers stock surges after cash raise
The main catalyst for the HIMS share price surge is that the company raised $1 billion in senior convertible notes, its biggest raise ever. In an X post, Andrew Dudum, its CEO, said that the amount, which was double what it had hoped, would help it to accelerate the long-term value and reduce dilution.
The new cash raise will help it to boost its balance sheet. Its recent earnings showed that it had over $273 million in cash and cash equivalents. It also had $48 million in short-term investments, $76 million in inventory, and its prepaid expenses were about $48 million. This brought its total current assets at over $446 million.
Today we announced $hims raised $1B, our largest raise yet, more than double what we set out for, thanks to strong demand from a wide range of leading investors. The offering was designed to accelerate long-term value creation and minimize shareholder dilution. More than just a
Growth continues
Hims stock price has also surged as investors cheered the company’s strong financial performance. Its most recent results showed that its revenue and user growth gained steam in the last quarter.
The results showed that it made revenue of $586 million in the first quarter, a 111% increase from the same period last year. This growth happened as the company became a more popular brand in the US, which led to more users.
It also happened because of its weight loss business, which has continued to add more users because its drugs are cheaper than mainstream names.
Hims & Hers made a net income of $49 million, up by 345% YoY, while its adjusted EBITDA rose by 182% to $91 million. Most importantly, the free cash flow continued soaring, reaching $109 million in Q1.
These numbers make it one of the fastest-growing companies in the United States. It is also beating other large players in the telehealth industry, like Teladoc, a company whose stock has imploded.
Hims & Hers ended the last quarter with 2.4 million subscribers, a 38% annual increase, and the management believes that the figure can jump to over 100 million over time.
Read more: Is the soaring Hims & Hers stock a good investment?
Analysts are bullish on Hims & Hers shares
Wall Street analysts are highly optimistic about the HIMS stock, even as the short interest continues to rise. The average estimate is that the stock will rise to $64, up from the current $46.95.
These analysts believe that Hims & Hers revenue will rise to $549 million in the current quarter, a 73% annual increase. They also hope the annual revenue this year will get to $2.34 billion, a 58% annual increase. It will then make $2.85 million next year, while the management believes that it will cross the $6 billion range by 2030.
These estmates assume that US authorities will not discontinue the company’s weight loss products.
Hims & Hers stock price analysis
The weekly chart shows that the HIMS stock price has been in a strong bullish trend in the past few years, as we predicted here. It moved from a low of $2.75 in 2022 to $72 today, bringing its market cap to over $14 billion.
The stock has formed an ascending channel connecting the lowest and highest swings since 2023. It has now moved above the upper side of this channel, and above all moving averages.
Most recently, the stock has moved above all moving averages, a sign that bulls are in control. Therefore, the outlook for the Hims & Hers share price is bullish, with the next point to watch being at $72.37. A move above that level will confirm a short-squeeze and push it to the next psychological point at $80.
The alternative scenario is where the stock hits that target and then resumes the downtrend since it will have formed a double-top pattern with a neckline at $23.75, its lowest level in March.
The post Hims & Hers stock price nears crucial level: is it a buy or sell? appeared first on Invezz
