Hims & Hers Health ( HIMS ) has been one of the market's standout growth stocks in recent years. The company has successfully built a direct-to-consumer health platform targeting conditions like hair loss, mental health, and more recently, weight loss—delivering very strong revenue growth and stock returns.
Hims & Hers (HIMS) shares are reeling after Novo Nordisk (NVO) severs its weight-loss drug relationship with the telehealth company. NVO claims HIMS was marketing knock-off weight loss drugs using "deceptive promotion" tactics.
The Danish maker of obesity drugs abruptly ended a Wegovy distribution deal with the telehealth firm, citing allegations about Hims' compounding and deceptive marketing practices.
Hims & Hers Health Inc.'s stock fell sharply on Monday after pharmaceutical giant Novo Nordisk, maker of the weight-loss drug Wegovy, said it was ending a collaboration with the telehealth-consultation company less than two months after it started.
Novo Nordisk accuses the telehealth company of breaking a law related to drug compounding.
Novo Nordisk said it is ending its collaboration with Hims & Hers due to concerns about the telehealth company's sales and promotion of cheaper knock-offs of the weight loss drug Wegovy. Novo Nordisk in April said it would offer Wegovy through several telehealth companies, such as Hims & Hers, to expand access to the blockbuster injection now that it is no longer in short supply in the U.S.
Hims & Hers reported 2.4 million subscribers in Q1 FY25, a 38% YoY increase from 1.74 million in Q1 FY24. Personalized treatments now make up 58% of the subscriber base, with 70% of new users choosing customized care in Q1. Monthly online revenue per subscriber rose 50% YoY to $84, driven by high adoption of tailored daily treatments.
HIMS accelerates global growth with ZAVA deal, AI investments and expanded access to obesity care treatments. However, macro challenges may hurt performance.
The bulls have well defended Hims & Hers' recovery from the April 2025 bottom (near to our fair value estimates), thanks to the growing adoption of its personalized healthcare offerings. These have directly triggered the growing subscriber base/ Revenue per Average Subscriber, with the improved manufacturing/ operating scale contributing to the richer profit margins. This is significantly aided by the growing GLP-1 partnership and the regulatory exemption surrounding compounding personalization, lending support to the raised FY2025 guidance and ambitious 2030 targets.
I expected Hims & Hers' stock to break $50, and now I'm buckling up for another rally, with EMAs stacked bullishly at the moment. The company's partnership with Novo Nordisk and the ZAVA acquisition for European expansion should drive the next leg of growth. Wegovy sales and potential cheaper Ozempic offerings are set to boost revenue, with subscriber growth and ARPU at record highs despite macro headwinds.
Hims & Hers offers a high-growth, recurring subscription telehealth business with strong user and revenue growth, expanding into multiple health segments. It is the market leader in telehealth easily outpacing its competition. The trend among millenials and Gen Z patients towards digital health should ensure Hims sustaining its pole position.
Hims & Hers Health (HIMS) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.