Why Hims & Hers Is a Buy Below $35 After Its 16% Pullback

Hims & Hers Health (HIMS) shares recently declined 16% after Novo Nordisk withdrew from a weight loss drug partnership that had initially driven a 100%+ rally. Despite this setback, the company's underlying fundamentals remain robust, with Q1 2025 revenue up 111% year-over-year to $586 million, subscribers growing 38% to 2.4 million, and free cash flow increasing nearly fivefold to $50.1 million. The article suggests that HIMS's strong subscription model and significant financial growth, coupled with its current valuation at 66% of its 52-week high, present a compelling turnaround opportunity for investors focusing on its core business strength rather than the recent partnership noise.

Analysis

Hims & Hers Health (HIMS) has experienced significant stock price volatility, driven by the establishment and subsequent withdrawal of a weight loss drug partnership with Novo Nordisk. This event catalyzed a 16% decline in the stock over the past month, erasing a portion of the prior 100% rally. Despite this partnership-related setback, the company's underlying fundamentals from its May 2025 quarterly report remain exceptionally strong. Revenue grew 111% year-over-year to $586 million, while the subscriber base expanded by 38% to 2.4 million. Most notably, free cash flow surged nearly fivefold to $50.1 million from $11.9 million in the prior-year period, underscoring the operational leverage of its subscription-based business model. The current valuation, at 66% of its 52-week high, presents a conflict for investors: the company's demonstrated growth engine versus the market's negative reaction to the lost partnership and a consensus analyst rating of "Reduce" with a price target of $39.58, which implies a 16.58% downside from its current price.

Key Decisions for Investors

• Investors focused on fundamental growth may view the current price, at 66% of its 52-week high, as an attractive entry point, given the reported 111% revenue growth and a fivefold increase in free cash flow.
• Potential investors should exercise caution, weighing the company's strong operational metrics against the negative sentiment from the withdrawn Novo Nordisk partnership and the consensus analyst price target of $39.58, which suggests notable downside risk.
• Monitor future subscriber and free cash flow growth in subsequent quarters to determine if the company's core business momentum can be sustained independently of the failed partnership catalyst.