Hims & Hers Health Surges 7.2% on Legal Victory, But Can the Momentum Hold?

Summary
• Hims & Hers Health (HIMS) rockets 7.2% intraday to $44.53, fueled by a court dismissal of Eli Lilly’s lawsuit against a rival telehealth provider.
• The stock trades above its 200-day moving average of $41.03, with Bollinger Bands signaling a potential breakout.
• Short interest jumps 8.72% to 31.07%, hinting at lingering bearish sentiment despite the rally.
• Deutsche Bank upgrades its price target to $48, but maintains a 'Hold' rating amid regulatory uncertainties.

Today’s 7.2% surge in HIMS reflects a pivotal legal development that eased litigation fears, though technical indicators and short-term volatility suggest a cautious outlook. The stock’s intraday range of $42.50 to $45.67 underscores the tug-of-war between bullish momentum and lingering regulatory risks.

Legal Reprieve Sparks Rally in Hims & Hers
The 7.2% intraday surge in HIMS was directly triggered by a federal judge’s dismissal of Eli Lilly’s lawsuit against Willow Health, a telehealth competitor. The ruling, which affirmed the legality of compounded GLP-1 medications under physician oversight, directly counters Novo Nordisk and Lilly’s claims that such practices infringe on trademarks. For Hims, this decision removes a key overhang, as the company has faced lawsuits from Novo Nordisk and now benefits from a judicial precedent that validates its business model. The stock’s sharp rebound also aligns with the company’s Q2 revenue of $544.8 million and its reaffirmed FY25 revenue guidance of $2.3–$2.4 billion, which signals resilience in its telehealth-driven growth strategy.

Healthcare Providers & Services Sector Mixed as Hims Defies Downside
While Hims & Hers Health surged 7.2%, the broader Healthcare Providers & Services sector saw mixed performance. UnitedHealth Group (UNH), the sector’s leader, fell 0.82% on concerns over regulatory scrutiny and margin pressures. This divergence highlights HIMS’s unique exposure to litigation risks versus the sector’s more diversified challenges. The rally in HIMS underscores its niche position in compounded drug distribution, contrasting with larger peers like UNH, which face broader operational headwinds.

Options Playbook: Leveraging Legal Clarity and Technical Breakouts
• 200-day MA: $41.03 (below current price); RSI: 31.0 (oversold); MACD: -2.85 (bearish divergence)
• Bollinger Bands: Upper at $54.10, Middle at $46.43, Lower at $38.76 (current price near middle band)
• Short-term bearish trend but long-term ranging pattern suggests volatility ahead.

Top Options Picks:
• HIMS20250912C44 (Call, $44 strike, 9/12 expiry):
- IV: 70.08% (high volatility)
- LVR: 18.80% (high leverage)
- Delta: 0.57 (moderate directional sensitivity)
- Theta: -0.200 (rapid time decay)
- Gamma: 0.076 (strong price sensitivity)
- Turnover: 279,370 (high liquidity)
- Payoff at 5% upside ($46.76): $2.76/share. This contract offers aggressive leverage for a potential breakout above $46.43, with high gamma amplifying gains if the stock surges.

• HIMS20250912C45 (Call, $45 strike, 9/12 expiry):
- IV: 70.61% (high volatility)
- LVR: 23.46% (very high leverage)
- Delta: 0.49 (moderate directional sensitivity)
- Theta: -0.190 (rapid time decay)
- Gamma: 0.077 (strong price sensitivity)
- Turnover: 349,220 (high liquidity)
- Payoff at 5% upside ($46.76): $1.76/share. This option balances leverage and liquidity, ideal for a controlled bet on a sustained rally above $45.67.

Trading Setup: Key resistance lies at $46.43 (middle Bollinger Band) and $45.67 (intraday high). A break above $46.43 could trigger a retest of the 52-week high at $72.98. Short-term bulls should watch for a close above $46.43 to confirm momentum. Aggressive bulls may consider HIMS20250912C44 into a bounce above $46.43, while a 5% upside scenario offers a 6.2% return on the $44 strike call.

Backtest Hims & Hers Health Stock Performance

Hims & Hers at a Crossroads: Legal Clarity or Regulatory Rebound?
The 7.2% rally in HIMS reflects a temporary reprieve from litigation risks, but the stock’s technical profile remains mixed. While the dismissal of Lilly’s case against Willow Health validates Hims’s business model, the company still faces high short interest (31.07%) and regulatory inquiries. Investors should monitor the 200-day MA at $41.03 as a critical support level and watch for a sustained close above $46.43 to confirm a breakout. In the broader sector, UnitedHealth Group’s 0.82% decline highlights divergent risks, but HIMS’s unique exposure to compounded drug litigation means its path forward remains distinct. Action: Watch for $46.43 breakout or a retest of $42.50 support.