Why Hims & Hers (HIMS) Stock Rocketed 45% Last Week: A Wegovy Deal and More
5min read Last week, hims & Hers Health (NYSE:HIMS) became the poster child of speculative momentum, soaring 45.3% after announcing a partnership with Novo Nordisk to co-market Wegovy—a drug in such high demand it’s been compared to gold dust. The stock’s meteoric rise to $40.82 on May 2, 2025, from $28.09 the prior week, wasn’t just about the deal itself, but its strategic timing amid a perfect storm of regulatory shifts, investor hunger for healthcare disruptors, and the allure of a “Wegovy gateway.” Let’s dissect what’s driving this rally—and why it might fizzle fast.
The Wegovy Play: A Telehealth Goldmine?
The linchpin of Hims & Hers’ surge is its pact with Novo Nordisk to distribute Wegovy, a weight-loss drug that’s become a cultural phenomenon. The deal allows patients to access Wegovy via a $599/month membership bundle on Hims’ telehealth platform, which includes 24/7 care, nutrition guidance, and all dose strengths of the drug. This move tackles two pain points: supply shortages (Wegovy was recently removed from the FDA’s shortage list) and access barriers, as Hims’ platform streamlines prescriptions and delivery.
For context, Wegovy’s demand is staggering. The FDA estimates that over 5 million Americans could benefit from the drug, and Hims’ bundled offering positions it as a key distributor. But this isn’t just about selling a drug—it’s about monetizing a subscription model. The $599/month price tag isn’t cheap, but for patients willing to pay, Hims’ platform becomes a one-stop shop for care, diagnostics, and medication.
The Financial Fuel: Earnings and Ecosystem
Investors are also betting on Hims’ broader momentum. First-quarter 2025 estimates project revenue of $537.85 million—a 93.4% year-over-year jump—and an EPS of $0.14, a 180% surge from 2024. These numbers aren’t just growth; they’re a validation of Hims’ pivot from its “male wellness” roots (remember the DHT supplements?) to a full-fledged telehealth ecosystem.
The company’s fourth-quarter 2024 results laid the groundwork: $1.5 billion in annual revenue (up 69% YoY), 2.2 million subscribers (45% growth), and its first full-year GAAP profitability ($126 million net income). These metrics signal that Hims can scale while maintaining margins—a rarity in a crowded telehealth space.
The Bulls vs. the Bears
Institutional investors are all-in: 63.52% ownership by funds like Freestone Grove Partners and Comerica Bank shows confidence. Yet insiders are fleeing—CEO Andrew Dudum sold $7.5 million worth of shares, and other executives reduced holdings. While insider selling often spooks investors, the stock’s climb suggests the market is prioritizing the Wegovy deal over management’s actions.
But risks lurk. The FDA banned Hims from selling compounded semaglutide (Wegovy’s generic alternative), stripping a potential revenue stream. Meanwhile, competitors like Eli Lilly’s tirzepatide (a diabetes/weight-loss dual drug) could undercut pricing power. If Hims’ bundled membership can’t offset rising drug costs, margins could crumble.
Analysts are split: Some raised targets to $68 (Canaccord Genuity) or $85 (bullish scenarios), but others downgraded to “Hold” due to valuation concerns. The consensus? A $36.92 price target—still below Hims’ current price, signaling skepticism about its premium multiple.
The Bottom Line: A High-Risk, High-Reward Gamble
Hims & Hers’ surge is a classic “story stock” rally: The Wegovy deal and telehealth growth narrative are firing on all cylinders. But investors must ask: Is this a sustainable moat or a fleeting sprint?
On one hand, the company is capitalizing on $599/month subscriptions that lock in recurring revenue—a model that works if retention stays strong. Its AI-driven diagnostics and lab testing add defensibility against competitors.
On the other, the stock’s volatility is legendary—91 moves of over 5% in the past year—and it’s still 49.5% below its 52-week high of $68.74. Regulatory hurdles, pricing wars, and execution risks could cap its upside.
Final Take: Hims & Hers is a compelling play on accessible healthcare—if you can stomach the rollercoaster. The Wegovy partnership and financial turnaround make it a “buy” for aggressive investors with a 2-3 year horizon. But tread carefully: The path to $68 (or beyond) is littered with execution traps. For the cautious, this might be a stock to watch from the sidelines—until the hype meets hard, sustainable profits.
In short: Wegovy’s allure is real, but so are the pitfalls.
