OK, we usually don’t post about stock price, but something looks concerning today with HIMS. Trading down over 17% at present.
The only news items I could find are that an insider sold $10+M and they announced the acquisition of a US based peptide company. They report 4Q24 and annual results on Monday. Maybe a large insider sale just before earnings is being taken as a signal? Whether or not it’s legal, it doesn’t look good.
Does anyone have any idea about what’s going on?
The FDA website indicated that the shortage of Novo Nordisk’s Ozempic and Wegovy has ended. The announcement is bad news for Hims & Hers, a compounding pharmacy that makes a knockoff version of Wegovy
I asked Grok and he answered:
“Hims & Hers Health, Inc. (HIMS) stock is down today, February 21, 2025, primarily due to a report from the U.S. Food and Drug Administration (FDA) indicating that the shortage of Ozempic and Wegovy—brand-name GLP-1 weight loss drugs—has been resolved. This development is significant for Hims & Hers because the company has been offering compounded versions of semaglutide (the active ingredient in Ozempic and Wegovy) to meet demand during the shortage. With the FDA stating that the shortage is over, the ability of Hims & Hers to legally provide these compounded alternatives may be restricted, as compounding is typically allowed only during shortages. This news has likely raised concerns among investors about a potential impact on the company’s revenue, given that GLP-1 products have been a key growth driver.”
Personally I will wait next week for the earnings for more clarifications. And the comments of the long term holders, roaming here.
HIMS is 10.4% in my portfolio.
MV
CNBC reported that the shortage of Novo Nordisk’s Wegovy and Ozempic drugs is resolved
$HIMS has been pounding the table for some time now that their weight loss offerings can survive a declared end to GLP-1 shortage:
To build on what @intjudo said, HIMS is also not just a short term GLP investment. It’s a disruptor in the healthcare space broadly. Pay attention to the moves they have been making the last few months: they also launched a nutrition service, a health collective, and purchased an at-home lab testing company.
Their ambitions are far greater than any one drug, they are looking to create a next-generation health services company. And that’s also why they took a big shot at the rest of the industry in the Super Bowl. From a marketer’s perspective, they are doing everything right to grow for the long term.
What percentage of HIMS sales/profits come from their versions of the drugs that are no longer on “shortage”?
They don’t provide a breakdown of revenue by product/service. I’m sure they track this internally, but they’ve made a decision that they don’t wish to share it with the stockholders - or anyone else for that matter. Personally, if I were an officer I too would vote for keeping this information proprietary. What possible benefit would be derived from publicly sharing it?
HIMS is up 71% over the last month and 110% YTD even at the current price. The market sells off the company heavily on any news regarding GLP shortage resolutions.
Using the term “knockoff” in the article is a fairly disingenuous word choice from the article as HIMS meets all the FDA standards for compounding and complying with cGMP good manufacturing processes. The company works directly with the FDA. This company is a threat to Novo and Lilly’s businesses as it makes it a lot easier to get the medications without going through a doctor who may want to treat only obese patients with these medications.
The CEO has detailed multiple times that they sell brand name Ozempic and Wegovy already through the app. Brand names for GLPs are much more expensive, so this news primarily effects the compounded GLPs that Hims makes.
My own take is the market has trouble finding an appropriate valuation for a tele-health company growing 77% and projecting even higher growth rates as profitability is going up. That’s basically unseen before in the marketplace.
The other day HIMS was up over 20% when they announced they had an at home testing kit, which is like a blood test that requires no needle but uses a “blood lancet”.
@wpr101 I think you’ve nailed it. The market doesn’t have any idea what the company is worth or how to go about measuring it. So we get an overreaction with just about any news that seems like it might impact their revenue. And your observation that all along they have also carried the branded weight loss products should some customer prefer that. It’s not like we do compounding, take it or leave it. It’s more like we can serve your needs and preferences.
AppLovin is in a similar spot. There has never been an advertising company that provided guaranteed ROAS (return on advertising spend). And the more customers that use their service to place ads, the smarter the AI engine gets thereby allowing them the ability to guarantee ever increasing spend. So how do you put a price tag on that?
I sold my entire position as soon as I could after the announcement of the end of the shortage. HIMS is going to have a monster Q4 and Q1 in the GLP-1 space. Then after that, the future is highly uncertain.
I sold because you are going to see negative growth comps in my opinion after Q4 and Q1 because of the sheer magnitude of formulated GLP-1 they were selling. Yes, you can buy Ozempic straight from their web site, but why would you do that? You could just get your doctor to prescribe it. Plus most people will be unable to afford Ozempic unless their insurance covers it.
Oral and generic GLP-1 drugs that do not violate Lilly and Novo’s patents will be considered unproven (maybe they are unproven or not, but people will consider them that way).
HIMS has a niche and a brand. This won’t kill them by any means. I’m just not excited about their prospects over the next year post formulated GLP1 meds. It’s highly uncertain.
All that said, I predict they will post a huge Q4 and Q1. Management may continue to talk down the shortage ending. It is just very difficult for me to quantify what happens to them from here (likely legal action will ensue if they get too cute).
Best of luck to you all. Interesting company that I have underestimated thus far.
Rob
Personally I think they should recognize that modeling revenue from oral, compounded and branded products is a necessary component of modelling their business from an Investor perspective.
They go on and on about transparency with their customers; I wish they had the same dedication to transparency with their Investors.
…that said, I just-now added in AH. Take GLP-1 and compounded GLP-1 off the table completely, and $HIMS is still going gangbusters. I’ve learned the hard way, multiple times, to make decisions based on revenue growth above all else, and I don’t see any problems, for the moment, with $HIMS’ revenue growth.
You are a brave man, intjudo, and I wish you the best of luck. Here is what I was trying to say about revenue growth comps. Look at their guidance. They guided Q1 at 530M (midpoint) and full year at 2.35B (midpoint). That implies almost no growth in Q2-Q4 from Q1 numbers.
Now under the hood what is happening is their GLP1 revenue which is huge in Q1 is dropping like a rock in Q2-Q4 and the rest of their business is still scaling in a good direction more than offsetting that drop.
This said, the top-line numbers are going to point to “no growth”. For a company of this multiple, that just isn’t good enough. So I see a headwind versus a tailwind that we seek out for our companies.
Every time I see a company post a big one-time revenue gain, even if it is relatively durable (think zoom), the stock just unperforms until the top-line growth numbers start reflecting growth again.
HIMS is an interesting company but has a poor moat (why should I buy their ED meds at $30/month when my doctor can prescribe it to me for $20 for 3 month supply). Now some people don’t want to have that conversation with their doctor, I get that, so there is some value here. But you could just buy from 10 other companies that will pop up too.
Honestly they have executed terrifically given their hand. I’ll wait it out until the reported growth resumes after we lap Q1 2025.
I wish you all the best.
Rob
I noticed that as well. But last year they beat the top end of their initial guide by 25%, consistently beating and raising along the way. I bought after the large drop as well, expecting this year to be more of the same. We shall see.
For full-year 2024, revenue soared 69% year-over-year to $1.5B. Excluding sales of GLP-1 medications such as compounded semaglutide, revenue rose 43% to $1.2B
Yemi Okupe, CFO, stated, “The success we are experiencing is a direct reflection of our improving ability to democratize access to high quality, personalized care across each of our specialties. Revenue excluding our GLP-1 offering increased 43% year-over-year to over $1.2 billion in 2024, meeting our previous 2025 revenue target a year early. Consolidated revenue increased 69% year-over-year to nearly $1.5 billion as our weight loss offering continues to offer an accelerant to these trends. We believe this signifies our platform’s growing ability to enter new specialties and scale rapidly, further establishing confidence that we are building a set of core capabilities that can scale with tremendous efficiency. This evolution is positioning us to serve tens of millions of individuals over time while simultaneously progressing toward our long-term profitability targets.”
No position right now, but I like the businesses with the best user interface and I think HIMS has that.
As I understand it HIMS can be medication / manufacturer agnostic and has nearly infinite market opportunities… as well as market competition.
I don’t invest in the healthcare / pharma markets so I’m out here, but thought the numbers were worth sharing.
If you go back a whole year to Q4 2023 report. They guided Q1 at 269.5 (midpoint) and full year at 1.185B (Midpoint). Which was them guiding that 22.7% of the yearly revenue would be in Q1. Now they are guiding at 22.5% of the yearly revenue in Q1. They earned 1.4765B which was them beating their year guidance by 24.6%. I would avoid looking at the Q1 guidance vs yearly guidance because its hard for a rapidly company to give accurate guidance on a quarter let alone a year from now.
Further on during the conference call they said they expect to see 725M in revenue for weight loss medication for 2025. They expect to hit that without GLP-1 revenue excluding what they got in Q1. So they see even with them losing access to selling GLP-1 that their weight loss revenue will continue to grow.
Drew,
Long HIMS
Rob,
Thanks VM for your post; I’m still learning and I really appreciate the opportunity to see in real time how more experienced investors do this. I know Zoom is just one example out of many and probably not meant to be representative of every scenario; that said I’d point out that Zoom at the time was a one-trick pony imo; they weren’t really in a position to leverage their moat to easily add new adjacent revenue streams.
The way I see it, the market as of right now has priced $HIMS with the following assumptions:
I don’t agree with any of 1…3 above, and I just don’t see a business that is sputtering out any time soon.
Thanks again!