Hims & Hers Health (HIMS): The Allure of GLP-1 Growth vs. The Pitfalls of Regulatory Turbulence

The Partnership Drama: A Catalyst for Chaos
Hims & Hers' abrupt termination of its partnership with Novo Nordisk in June 2025 was a defining moment. The collaboration, announced just two months prior, aimed to expand access to Wegovy®, Novo's FDA-approved weight-loss drug. But Novo pulled the plug after accusing Hims & Hers of selling illegitimate knockoff versions of semaglutide, compounded in unregulated Chinese facilities. This not only severed direct access to Wegovy® but also exposed Hims' reliance on controversial “personalized” drug sales—a practice now under regulatory scrutiny.

The fallout was immediate: Hims' stock plummeted over 34% on June 23, wiping billions off its market cap. Yet, traders pounced on the chaos, spotting a potential technical breakout in the rubble.

Technicals: A Bullish Pattern in Bearish Times

Analysts identified a cup-with-handle formation on Hims' daily chart, a classic bullish pattern signaling a potential upward thrust. The stock broke above resistance at $54.62—a key level above the Ichimoku cloud—and held critical support at $45.00. Momentum indicators like the MACD and RSI suggested a resurgent buying pressure, even after the Novo shock.

However, volatility remains extreme. Hims' beta of 3.24 (versus the S&P 500's 1.0) means its stock swings wildly with market sentiment. The 50-day moving average ($49.65) and 200-day moving average ($39.46) form a “golden cross” bull signal, but a breakdown below $40 could trigger panic selling.

2030 Targets vs. Regulatory Realities
Hims' long-term ambitions are audacious: $6.5 billion in revenue and $1.3 billion in Adjusted EBITDA by 2030. To hit these goals, the company must grow revenue at a 27% CAGR—a pace that strains credibility given its current challenges.

• Regulatory Risks: The FDA's crackdown on compounded GLP-1 drugs (e.g., knockoff Wegovy®) could erode Hims' cost advantage. Compounded drugs, marketed as “personalized” alternatives, now face stricter oversight, forcing Hims to pivot to pricier FDA-approved drugs.
• Competitive Pressures: Rivals like LifeMD and Ro, now Novo's partners, can undercut Hims' pricing while offering legitimate Wegovy® access. Meanwhile, giants like Amazon and Walmart are muscling into telehealth, threatening Hims' subscriber growth.
• Margin Woes: Gross margins have already shrunk from 82% in 2024 to 73% in Q1 2025, squeezing profitability as costs rise.

The Investment Case: High-Risk, High-Reward Speculation
For traders willing to gamble, Hims' technical setup and valuation create an intriguing short-term opportunity. At current prices (~$55), the stock trades at just 8x 2030 EBITDA estimates, a discount to peers. A successful breakout could propel it toward its all-time high of $72.98, offering a 33% upside.

But strict risk management is non-negotiable:
1. Entry: Wait for a pullback to $45–$47 (the handle of the cup-with-handle pattern).
2. Stop-Loss: Set a hard stop at $38–$40 to limit losses if the pattern fails. Historical backtests show that golden cross signals have underperformed, with a 40% hit rate and a maximum loss of -12.4% in recent years—underscoring the need for discipline.
3. Target: Aim for $65–$70, with $72.98 as a stretch goal.

Avoid long-term holds: Regulatory overhang, margin pressures, and competitive threats make 2030 targets a stretch.

Conclusion: A Volatile Trade, Not a Buy-and-Hold
Hims & Hers is a classic “story stock”—its telehealth platform and GLP-1 dominance are compelling, but execution risks loom large. The Novo partnership collapse highlights the fragility of its business model, reliant on regulatory gray areas.

Traders with a high-risk appetite might dip in for a short-term swing, but do not underestimate the regulatory storm clouds. The FDA's stance on compounded drugs and Hims' ability to adapt could make or break this trade. For now, speculate with caution, and let the charts—not hype—guide your exits. Historical backtests reveal the golden cross strategy's mixed results, reinforcing that patience and risk discipline are paramount.

Disclosure: This analysis is for informational purposes only. Always conduct your own research and consult a financial advisor before making investment decisions.