Hims & Hers Health: A Volatile Ride with Growth Potential
Hims & Hers Health (HIMS), a telehealth company that provides virtual access to healthcare professionals, has been making waves in the market since its public debut in 2021. Known for its unpredictable price swings, the stock has drawn the attention of investors seeking both risk and reward.
“While above [the newly-formed support zone of] $25.50, the upside could be a double from here based on the long-term technical projections of $65.00,” observed Todd Gordon, Founder of Inside Edge Capital. Gordon, who holds HIMS in his firm’s Tactical Alpha Growth portfolio, sees continued potential in the company despite its volatility.
Initially highlighted in July at around $23.50, HIMS currently trades at $32.50, but its journey hasn’t been a straight line. After dipping below $14 in September, the stock rebounded, breaking through a critical three-year resistance level of $25.50. This breakout, coupled with positive long-term predictions, has fueled optimism despite the tumultuous ride.
Much of the buzz surrounding Hims & Hers stems from its foray into the highly competitive weight loss drug market. Offering compounded versions of Ozempic and Wegovy, the company provides these GLP-1 drugs via online consultations with licensed medical professionals. While HIMS acknowledges the FDA shortage governance surrounding GLP-1 drugs produced by companies like Lilly (LLY) and Novo Nordisk (NVO), the company emphasizes that its compounded offerings, while requiring a prescription, are accessible through its online platform.
“Hims & Hers offers compounded semaglutide injections, which contain the same active ingredient as Ozempic and Wegovy. These compounded medications are not sold over the counter; instead, they require a prescription from a licensed healthcare provider. Hims & Hers facilitates this process through online consultations, where licensed medical professionals assess patients’ eligibility for the treatment," the company states.
While Eli Lilly’s GLP-1s have been removed from the FDA shortage list, Novo Nordisk’s products remain scarce, creating some degree of market uncertainty. Interestingly, despite the media attention surrounding these weight-loss drugs, HIMS reports that they represent less than 10% of its total revenue. This suggests other areas of its business may be driving its impressive growth.
Gordon, echoing investor confidence, notes, "Hims & Hers continues to show significant relative strength suggesting the market remains confident in this name." With plans to increase his firm’s holding in HIMS from 1% to 2% in the short term, Gordon remains bullish on the company’s future despite the volatile market conditions.
