KeyBanc starts Hims & Hers with caution on margin

Investing.com -- KeyBanc initiated coverage of Hims & Hers with a Sector Weight rating saying potential constraints on margin expansion despite growth opportunities from international expansion and new treatment launches.

“While we are intrigued by the international ramp and expansion into more treatments, we believe it may lead to more muted margin expansion in 2026E. As such, we initiate with a Sector Weight rating,” KeyBanc analyst said.

Hims, a direct-to-consumer healthcare company, had 2.4 million subscribers as of the second quarter of 2025, including 1.5 million on personalized care plans.

The company offers products across sexual health, dermatology, mental health, weight loss, and hormone health, with recent additions in testosterone and menopause support.

KeyBanc said the company’s established brand, high gross margins, and potential feedback loop between treatments and outcomes position it for growth.

However, the brokerage flagged intense competition, regulatory scrutiny, challenging comparisons from previous GLP-1 shortages, and limited experience in international markets as headwinds.

The bank projects Hims’ revenue to rise from $2.35 billion in 2025 to $3.34 billion in 2027, with EBITDA growing from $309 million to $505 million over the same period. Analysts expect the company to prioritize subscriber and revenue growth, which may temper EBITDA margin expansion in 2026.

KeyBanc set a fair value estimate of $52 based on a 2027 EV/EBITDA multiple of 26 times. The firm said it would revisit its rating if Hims achieves more scale with lab testing initiatives and new treatments or if more attractive entry points emerge for investors.

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