Why Hims & Hers Stock Soared 27%: A Strategic Bet on Weight-Loss Demand

On May 2, 2025, shares of Hims & Hers Health (NYSE:HIMS) surged over 27%, jumping from $28.50 to $36 per share in early trading, after the company announced a landmark partnership with Novo Nordisk to offer Wegovy, the blockbuster weight-loss drug, through its telehealth platform. The deal, which allows self-paying patients to access Wegovy alongside a Hims & Hers membership for $599 per month, has reignited investor optimism about the company’s ability to capitalize on the booming obesity-treatment market.

The Strategic Play: Telehealth Meets Wegovy

The partnership marks a pivotal shift for Hims & Hers, which had previously struggled to sustain momentum after capitalizing on compounded versions of semaglutide (the active ingredient in Wegovy and Ozempic) during a recent FDA-mandated shortage. With the shortage resolved, the company pivoted to align itself with Novo Nordisk’s NovoCare Pharmacy, offering Wegovy directly—a move that positions it as a credible provider of FDA-approved treatments.

The $599 monthly package includes unlimited Wegovy doses, physician consultations, and a Hims & Hers membership, addressing a critical gap in access to costly weight-loss therapies. This model not only taps into the soaring demand for GLP-1-based drugs like Wegovy but also creates recurring revenue streams, a key metric for investors.

Why Investors Are Betting Big

The surge reflects more than just the Novo Nordisk deal. Hims & Hers has been a standout performer in a sluggish healthcare sector:

• Stock Performance: Shares have nearly tripled in the past year, rising from $12.50 in May 2024 to $36 in early May 2025. Year-to-date gains of 48% contrast sharply with the broader healthcare sector’s 8% decline.
• Revenue Growth: Analysts project Q1 2025 revenue of $538.4 million—a 93% jump from $278.2 million in the same period in 2024—driven by rising subscriptions and partnerships.
• Valuation Gap: Despite the surge, Hims & Hers remains undervalued relative to analysts’ $44.82 consensus price target. This gap suggests further upside if revenue and earnings forecasts hold.

Risks and Challenges Ahead

While the partnership is a positive step, risks linger. Hims & Hers’ high marketing expenses—historically eating up over 50% of revenue—could strain margins. Additionally, competition from traditional pharmacies and telehealth rivals like Nurx or Roman remains fierce.

The company’s upcoming May 5 earnings report will be critical. Analysts estimate an EPS of $0.23, up from $0.08 in Q1 2024. However, Hims & Hers’ stock has historically swung wildly post-earnings, with a 44% chance of a positive one-day return but also sharp drops if results miss expectations.

The Bigger Picture: Obesity Care’s Golden Age

The partnership underscores a broader trend: obesity treatments are now a multibillion-dollar category. With 42% of U.S. adults classified as obese, demand for drugs like Wegovy and Eli Lilly’s Mounjaro is surging. Hims & Hers’ telehealth platform—already serving 5 million subscribers—provides a scalable distribution channel for these therapies.

Even more telling: the FDA’s resolution of the semaglutide shortage forced Hims & Hers to pivot from compounded versions to branded drugs, a regulatory shift that could reduce legal risks and improve credibility. Meanwhile, the company’s plans to add Eli Lilly’s tirzepatide (despite no formal partnership) highlight its aggressive approach to dominating the GLP-1 market.

Conclusion: A High-Reward, High-Risk Opportunity

Hims & Hers’ 27% surge on May 2 was no fluke—it reflects a strategic bet on one of healthcare’s fastest-growing markets. The Novo Nordisk deal addresses a clear unmet need while leveraging its existing infrastructure. With a $599 monthly model that could scale to millions of subscribers, the company has the potential to deliver recurring revenue and sustain growth.

Yet, investors must weigh the risks. High marketing costs and execution hurdles—like managing FDA approvals and competing with established pharmacies—could stifle progress. If Hims & Hers delivers on its Q1 revenue target of $538 million and continues to expand its drug portfolio, the stock could close the gap to its $44.82 price target. For now, the May 5 earnings report will be the next key test.

In a sector where obesity treatments are a rare bright spot, Hims & Hers’ pivot to branded drugs and recurring revenue models positions it to thrive—if it can navigate the challenges ahead.