JPMorgan Bullish on Healthcare Tech and AI Legal Platforms

Overview

This JPMorgan monthly US equity thematic research report focuses on multiple small/mid-cap companies, highlighting the initiation of coverage on Hims & Hers Health with an Overweight rating, maintaining LegalZoom's Overweight rating while adding it to the Positive Catalyst Watch list, and analyzing investment opportunities in cybersecurity, humanoid robotics, and gaming sectors.

Core views

The report initiates coverage on HIMS with an Overweight rating and $35 target price (December 2026). The Novo partnership eliminates major legal concerns, transitioning the GLP-1 business from volatile to more predictable. HIMS has 2.5 million subscription users covering specialized areas like weight loss and women's health, with the Novo partnership expected to generate over 100,000 Wegovy prescriptions monthly, corresponding to approximately $350-400 million in annual revenue. LegalZoom was added to the Positive Catalyst Watch list with an Overweight rating maintained and $11 target price. The report believes the market underestimates its extensive AI partnerships and improving business formation momentum. LZ's collaborations with ChatGPT and Claude have enhanced brand awareness, with January-February business formation data showing 25% YoY growth, indicating strong entrepreneurial activity. In cybersecurity, the report notes that foundational models are accelerating security software demand as attack surfaces evolve and expand at unprecedented rates. Platform vendors are best positioned to address emerging AI threats, with CRWD and PANW being clear beneficiaries while other related companies also stand to gain. The humanoid robotics market is at an inflection point, with global total addressable market estimated at approximately $24 billion by 2035. Regal Rexnord, Timken and Allient occupy strategic positions in the value chain.

Analysis framework

The report employs multi-dimensional analysis, conducting in-depth fundamental examination of each company. For HIMS, focus areas include business transformation, partnership dynamics and regulatory environment changes; for LZ, emphasis is placed on evaluating its AI partnership strategy and market condition improvements; cybersecurity analysis examines demand drivers from technological evolution and threat landscape changes. Valuation-wise, HIMS is valued at 22x 2027 estimated EBITDA, representing a slight premium to the 19x average of internet/subscription platforms, digital health and DTC peers, primarily based on its faster revenue growth prospects. LZ currently trades at 5x EV/EBITDA with a target multiple of 10x.

Methodology notes

• Valuation MethodologyEV/EBITDA valuation

  The report uses EV/EBITDA multiples for relative valuation

  A common enterprise valuation method comparing a company's enterprise value to its earnings before interest, taxes, depreciation and amortization. Used in this report to assess HIMS and LZ's valuation rationality

• Industry Analysis FrameworkTAM Analysis

  The report conducts total addressable market analysis for humanoid robotics

  Estimates maximum potential revenue opportunity for specific markets/products to assess growth potential. Used in this report to quantify long-term opportunity in humanoid robotics market, projected to reach $24 billion by 2035

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Hims & Hers Health (HIMS)

  Benefits from business transformation and reduced regulatory risks through Novo partnership

  Strengths

  Vertical integration, international footprint, brand recognition, US peptide manufacturing and compounding facilities

  Weaknesses

  Investor skepticism, high short interest; competition from Ro, Lilly Direct and Amazon

  Comparison

  Compared to internet/subscription platforms, digital health and DTC peers, HIMS enjoys valuation premium

  Risks

  Regulatory risks, intensifying competition, rising customer acquisition costs

• LegalZoom (LZ)

  Benefits from AI partnerships enhancing brand awareness and improving business formation environment

  Strengths

  Law firm network with 1,000 attorneys, partnerships with AI giants, net cash position exceeding 20% of market cap

  Weaknesses

  Market underestimates value of AI partnerships

  Comparison

  Currently trades at 5x EV/EBITDA below 10x target multiple

  Risks

  Business formation environment volatility, competitive risks

Key data

• HIMS Target Price$35December 2026 target price based on 22x 2027 estimated EBITDA
• HIMS Wegovy Prescriptions100K+/monthProjected monthly prescriptions post Novo partnership, corresponding to $350-400 million annual revenue
• LZ Target Price$11Overweight rating maintained, 10x EV/EBITDA target multiple
• LZ Short Interest6.2%Short interest as percentage of float, above peer levels

Impact & implications

The report believes HIMS' business transformation and LZ's AI partnership strategy create positive catalyst pathways for both companies. Accelerating cybersecurity demand supports technological development in humanoid robotics, with related supply chain companies positioned to benefit from this long-term trend.

Risks

• Regulatory changes
• Intensifying competition
• Macroeconomic impact
• Technology execution risks

What to watch

• HIMS subsequent brand partnership developments
• LZ Q1 performance
• Cybersecurity demand trends
• Humanoid robotics technology advancements