One of the most exciting growth stories in the market is that of Hims & Hers Health Inc. (NYSE: HIMS). This company has combined the growth and efficiency aspects of the technology sector with the safety and stability of the medical sector. With this mixture in the business model, investors have the best of both worlds, allowing them to move forward with further upside potential.
[content-module:CompanyOverview|NYSE: HIMS]However, some concerns are being raised about the stock, given that management has made a new strategic decision that does not sit well with the broader market as of June 2025. Toward the end of May 2025, Hims & Hers stock rose to flirt with its 52-week high prices once again, yet failed to make any further significant breakthroughs after the news was announced.
To expand its reach and maintain the upward momentum in stock price and underlying financials, Hims & Hers decided to pursue an overseas acquisition, which initially seemed acceptable to investors.
Shortly after the positive reaction to the news, the stock had given up most of its previous gains, falling by as much as 5.5% in one week alone. Now, investors are left wondering whether this is a dip they can buy or whether it is prudent to wait for lower prices.
What’s Driving the Fall in Hims & Hers?
In a press release, Hims & Hers announced that it will be acquiring a European company named Zava. The objective of adding this brand to the portfolio suggests an interest in expanding operations and presence in Europe’s digital healthcare industry, which has not seen even a fraction of the growth compared to the United States.
Considering that European companies are typically subject to more regulation and hurdles to clear, this may be a factor influencing the bearish price action, given that potential shareholder rewards may come much later than anticipated through this acquisition.
More than that, the current geopolitical stance between the European Union and the United States is as tense as ever, considering that trade tariff talks have escalated between the two parties, suggesting that neither one is yet happy with the results that have been made thus far.
And, of course, anything related to tariffs will likely bring on bearish price action and sentiment, so those are two risks that investors need to keep in mind when moving forward with Hims and its stock. Of course, it isn’t all bad news since the company has already proven to be a leader in its space and a free cash flow machine to compound value onto itself.
However, today’s price may not be enough to mitigate these potential risks, regardless of how good the company's financials look.
A Better Price for Investors
In a fundamental sense, this all-cash acquisition will impact the company’s valuation, as investors will now need to wait until the actual financial impact is clear in terms of equity and ownership. This is why the stock might be too expensive today at roughly $53 per share.
[content-module:TradingView|NYSE: HIMS]A more sensible level discounts these risks, and one that is also supported by previous areas of interest. In the Hims & Hers chart, investors can see that most of the volume for the past 12 months occurred around $30-$32 per share, marking the onset of a rally that doubled the stock price within a month.
This is likely where institutional players are waiting to take action again, understanding that this so-called “support” would potentially price out the remaining uncertainties and risk of this new European exposure. Far from being a thesis or a view, it seems that other minds on Wall Street have subscribed to this trend.
[content-module:Forecast|NYSE: HIMS]Citigroup analyst D. Grosslight got ahead of the pack in early May 2025, arguably when the impact of tariffs would have been clearer, even if Hims & Hers wasn’t as exposed to overseas markets yet.
His view stands at a Sell rating with a valuation target of just $30 per share.
Far from turning bearish on the company itself, which still boasts great growth rates, margins, and profitability, this valuation can be taken at face value as one that effectively mitigates the short-term downside that this new acquisition and European exposure could create.
After that risk is out, investors could once again be in for a fantastic risk-to-reward ratio, one that could double their investment as it would have in May 2025.
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