Hims & Hers Stock Defies Analyst Caution with Major Facility Investment

Hims & Hers US4330001060

Shares of the telehealth company Hims & Hers advanced on Friday, closing 2.27% higher at $35.55. This move came as investors appeared to weigh a significant corporate investment announcement more heavily than a renewed note of caution from a major financial institution.

The trading session was characterized by conflicting signals. Analysts at Bank of America Securities reiterated their "Underperform" rating on the stock, maintaining a price target of $32. In his analysis, strategist Allen Lutz pointed to softening online metrics, citing data that indicates declining trends in app downloads and order volumes. The firm's forecast for fourth-quarter online revenue, projected between $584 million and $609 million, sits below the consensus estimate of $608 million.

Countering this skeptical view, Hims & Hers announced a substantial capital expenditure on the same day. The company revealed plans to invest over $200 million to expand a production facility in Ohio. This expansion is expected to double operational capacity and create approximately 400 new jobs. To the market, this served as a tangible signal that management anticipates sustained, strong demand and is committing capital accordingly.

The Core of the Valuation Debate

This divergence highlights the ongoing debate surrounding the company's valuation and future growth drivers. Skeptics, including Bank of America, express concern over what they see as elevated expectations for 2026, which incorporate an additional $440 million in revenue growth. A significant portion of this projected growth is tied to the volatile market for GLP-1 weight-loss medications. Competition in this sector is intensifying, notably with Eli Lilly recently reporting successful Phase III data for oral GLP-1 drugs.

Proponents of the stock, however, focus on the firm's expanding international footprint, including its moves into the United Kingdom and Canada, alongside its proven direct-to-consumer business model. The current price-to-earnings ratio of approximately 59 reflects these high growth expectations but also implies that flawless execution is required.

Awaiting the Decisive Data

The forthcoming fourth-quarter earnings report, expected in early 2026, is likely to provide clarity on which narrative will prevail. Should the company's results fall short of consensus estimates, the cautious analyst thesis would gain substantial credibility. Conversely, if management delivers on its targets, the Ohio investment will likely be viewed as a prescient strategic move. For now, the share price action suggests investors are tentatively siding with the growth story.