HIMS Stock To $25?

Hims & Hers (HIMS) stock plummeted 35% on June 23, 2025, after Novo Nordisk abruptly terminated their brief partnership, which had previously fueled a 150% HIMS stock surge by promising direct access to Wegovy. Novo Nordisk cited concerns over HIMS's "illegal mass compounding and deceptive marketing" due to its continued sale of compounded semaglutide despite the FDA ending the shortage justification. This termination fundamentally alters HIMS's growth trajectory, raising significant questions about its long-term viability and regulatory compliance, especially as its current valuation of 7x trailing revenues remains elevated compared to its historical average of 3x, suggesting potential for further downside.

Analysis

Hims & Hers Health (HIMS) experienced a 35% stock price collapse on June 23, 2025, following the abrupt termination of its two-month-old partnership with Novo Nordisk. This partnership, which was intended to provide HIMS direct access to the blockbuster weight-loss drug Wegovy, had been the primary catalyst for the stock's prior 150% surge. Novo Nordisk cited HIMS's continued sale of compounded semaglutide and associated "deceptive marketing" as the reason for the dissolution, highlighting a critical strategic error by HIMS. The company's decision to pursue its compounded drug business, which became legally tenuous after the FDA declared the semaglutide shortage had ended, created a direct conflict with its partner and undermined the very growth story investors had priced in. Consequently, the fundamental investment thesis is now impaired. Despite the sharp sell-off, HIMS's valuation remains elevated at approximately seven times trailing revenues, substantially higher than its historical five-year average of three times. A reversion to this historical multiple would imply a further 40% downside from current levels to around $25, suggesting the market correction may not be complete.

Key Decisions for Investors

• Investors should recognize that the fundamental growth thesis for HIMS has been broken, and the 35% stock decline is not a simple buying opportunity but a reflection of diminished long-term prospects.
• The stock's current valuation at seven times trailing revenues, more than double its historical average, presents significant further downside risk as the key catalyst for that premium has been eliminated.
• Monitor for any regulatory or FDA actions concerning the legality of HIMS's compounded drug sales, as this now represents a primary operational and legal risk for the company's remaining business model.
• Consider that HIMS's path forward relies on a lower-margin, niche business with significant regulatory uncertainty, which is unlikely to replicate the scale or profitability that the Novo Nordisk partnership promised.