The stock market certainly had its outperformers as the latest trading week came to a close, but it didn't seem Hims & Hers Health (HIMS -2.96%) would be one of them. As of the pre-market hours on Friday, the specialty healthcare company's shares were trading down by almost 12%, according to data compiled by S&P Global Market Intelligence. That fall can be traced to a new take on the company from a pundit following its trajectory.
A downgrade
Hims & Hers is obeying the law of stock market gravity, which mandates that any company soaring in price must eventually drop, by some level, at some point.
The telehealth specialist was a hot item on the exchange earlier this year, when it released the first set of quarterly results in its history to feature a bottom-line profit. Better, the company beat analyst estimates for both revenue and net income in that (fourth) quarter, and exceeded the average projection for revenue in its full-year guidance.
Some market professionals feel that the resulting share price climb has left the company overvalued. On Tuesday, one of those folks went as far as to downgrade his recommendation on the stock. This was Glen Santangelo of Jefferies, who now feels Hims & Hers is only a hold -- previously he had ranked it a buy. He also cut his price target, albeit slightly, to $15 per share from the former $17.
Solid performance, but richly valued
In his research note detailing the recommendation chop, Santangelo wrote that Hims & Hers has done an admirable job of "executing on many fronts."
"However," Santangelo said, "with expectations now at a more appropriate level (commensurate w share price up roughly 50% year-to-date) and growth slowing, we believe the investment case is better understood."
