Why Hims & Hers Health Stock Couldn't Beat the Market Today

Hims & Hers Health (NYSE: HIMS) stock labored mightily on Wednesday, but in the end, it couldn't top the benchmark S&P 500 index. Investor excitement about news of a fresh product launch the previous day was tempered by a lukewarm analyst note regarding the telehealth company's prospects.

Slimming products for fat profits

The great opportunities in the healthcare field now have to do with obesity drugs, of which precious few have been approved specifically for the indication by the Food and Drug Administration (FDA).

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Hims & Hers not only recognizes these opportunities but has eagerly jumped on them. Earlier this year, during a shortage of such drugs, it took advantage of a legal loophole that allowed it to (briefly) sell compounded semaglutide to its customers. This is the molecule behind Novo Nordisk's white-hot Wegovy weight-loss injectable.

That shining moment was over nearly as soon as it began since the shortage was soon declared to be over. Undaunted, on Tuesday, Hims & Hers announced it is to offer branded versions of tirzepatide -- the molecule in the other FDA-approved obesity jab, Eli Lilly's Zepbound. It's also gearing up to sell biosimilars of Novo Nordisk diabetes treatment liraglutide.

Analytical skepticism

Investors plowed into Hims & Hers stock that day, but Wednesday was a different story. Pouring cold water on the company, Truist Securities analyst Jailendra Singh reiterated his hold recommendation on the stock in a new research note.

According to reports, Singh speculated that much of the excitement was due to the erroneous assumption that the tirzepatide arrangement is a formal collaboration between Hims & Hers and Eli Lilly (it isn't). Although he believes the new products will help boost the company's fundamentals, he doesn't feel they'll make a monster difference.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $285,647!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,315!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $500,667!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of April 1, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.