Hims & Hers Stock (HIMS) Loses Weight as Analysts Call for Insurance Pivot

Shares in Hims & Hers Health (HIMS) were lower today as analysts said a potential tie-up with health insurers could help keep it thriving.

FDA Rule

Hims has had a stellar last six months with its stock rocketing 84% over the period as it saw huge demand for its cheaper compounded versions of popular weight-loss drugs such as Novo Nordisk’s (NVO) Wegovy.

The U.S. Food and Drug Administration (FDA) was happy for this to go ahead when these drugs were in short supply but as these shortages eased it ruled that compounded sales had to end by May 22.

This led to a decline in the HIMS stock price with it dropping 14% in the week after the FDA’s deadline and now down around 18% from a peak in February.

That’s despite the group now selling so-called “personalized” dosages of Wegovy, starting at around $165 a month, under rules allowing it for clinical reasons such as decreased side effects. Hims also sells liraglutide, a generic version of an older Novo diabetes drug that also causes weight loss, as well as branded Wegovy and Eli Lilly’s (LLY) rival Zepbound.

However, analysts fear it’s not enough for the share price to bounce back. Some question whether its offerings qualify as “personalized” and say it is unclear if Novo, which has said mass production of copies is breaking the law, will allow it.

Time to Transition

Instead, they say, Hims should pivot to work with insurers as its rivals Ro and Noom do.

“With the semaglutide shortage declared over, Hims now has to transition its model to generate growth from other products within its broad weight-management program,” said Michael Cherny, a healthcare analyst at Leerink.

He said that any expansion of insurance coverage for the drugs would lessen the need for cash-pay vendors and compounders, stymying Hims’ growth. Hims could miss growth targets if customers go elsewhere, he said.

The company has targeted revenue of $6.5 billion by 2030. Analysts are forecasting Hims 2025 revenue of $2.4 billion, up from $1.5 billion in 2024, and earnings of 65 cents a share, according to LSEG data.

Is HIMS a Good Stock to Buy Now?

On TipRanks, HIMS has a Hold consensus based on 2 Buy, 7 Hold and 2 Sell ratings. Its highest price target is $68. Its consensus price target is $42.09 implying a 25.27% downside.

See more HIMS analyst ratings