Hims & Hers Health Update
Hims & Hers Health has been recognized as one of the standout growth stocks lately. The company has successfully developed a direct-to-consumer health platform that addresses issues like hair loss, mental health, and more recently, weight loss.
However, the stock took a significant hit, dropping over 30% on Monday. This selloff came after an impressive rise, where shares surged by over 150% at two different points in the first half of 2025. The catalyst for the decline was news about a partnership setback with Novo Nordisk.
Specifically, Novo Nordisk announced it would no longer work with Hims on providing GLP-1 weight loss drugs, including a conjugated semaglutide. The company cited Hims’ use of a modified version of its medication and concerns related to sales and marketing tactics as reasons for the termination.
This development raises some valid worries among investors. Nonetheless, Hims & Hers remains a growing player in an appealing sector. We’ll take a closer look at the company’s fundamentals, the current landscape, and the strategies in the broader GLP-1 industry, especially for those considering stock purchases.
Hims and Hers: Growth Prospects
Over the last couple of years, Hims has seen substantial growth, and their metrics still appear quite promising, particularly after recent updates. The company currently holds a Zacks Rank #3, reflecting a mixed revenue outlook in recent months. Trading at a premium rating of 41 times next year’s revenue may seem steep, but it’s not out of line for firms expected to grow rapidly.
Looking ahead, revenues are anticipated to climb by 36.5% annually over the next three to five years, with a projected increase of 58.5% this year and 22.6% next year.
Challenges for Novo Nordisk and Eli Lilly
Interestingly, major players in the GLP-1 space have faced challenges of their own. Novo Nordisk’s shares have plunged over 50% from their 2024 peak, while Eli Lilly has shown some relative stability, though it’s still experiencing its own ups and downs. Both companies must navigate supply constraints, reimbursement issues, and stiff competition in the obesity treatments market. Despite these challenges, Eli Lilly’s strong performance juxtaposed with Hims’ robust growth suggests some investor confidence may still lie with these names.
Despite the volatility, the long-term prospects for the GLP-1 treatment market remain promising. Some analysts believe the global market for these weight loss methods could surpass $150 billion by 2035. While losses from the Novo partnership are setbacks, Hims may still find avenues for growth through either alternative partnerships or innovative strategies.
3-Day Buying Rule for Hims Stocks
For those eyeing a potential dip in Hims stocks, a 3-day rule could be beneficial. Sharp declines often lead to subsequent challenges and volatility, so allowing a few days for things to stabilize might help in making a more informed decision on entry points.
Should Investors Consider Hims Stocks?
Hims currently stands as a high-risk, high-reward investment. The long-term outlook is quite appealing, given the company’s strong revenue trajectory, expanding customer base, and alignment with significant healthcare trends.
However, the near-term is fraught with uncertainty related to losing the Novo partnership, regulatory complexities, and premium valuations, warranting a cautious approach. Investors might prefer to wait for the situation to settle before committing any funds, even as opportunities for long-term growth may arise.
