Our Stock of the Week is Hims & Hers Health, Inc (HIMS). HIMS is an online platform that connects patients with licensed medical professionals for a variety of health concerns, including support for sexual health, mental health, weight loss, hair regrowth, and skincare.
HIMS’s recent strong growth is due to sales of a compounded formulation of GLP-1 called tripeptide. Because of the shortage of the drug, compounders took advantage of the situation, but there was concern that after the shortage ended there would be restrictions imposed. However, on October 18, the FDA stated that it did not plan to take any action against GLP-1 compounders while reevaluating Lilly’s (LLY) Zepboung drug. There is a risk that this compounding business may be restricted in the future, but for now, it is growing at a tremendous pace.
Even without the boost in sales from weight loss drugs, HIMS has very strong sales growth in other sectors of its market. In its most recent quarter, sales jumped 52% to $315 million. The company has just turned eps positive in the last couple of quarters, and it is looking at eps of $0.34 in 2024 and 130% growth to $0.74 in 2025.
On Monday morning, Bank of America raised its price target for HIMS to $25 and stated that data points to upside to revenue estimates when the company reports earnings after the close on November 4. On October 14, Jeffries also stated that “all data signs point to a 3Q beat”.
Technically, the stock has a cup-and-handle pattern that forms under resistance at around $23. With expectations of a strong quarterly report, conditions are good for a breakout in anticipation of the news.
As always, we will look to trade the stock very aggressively and will not chase a gap-up open on Monday.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in HIMS. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
