Well, that escalated quickly—and then de-escalated even faster. Shares of Hims & Hers Health Inc. (HIMS) were up a staggering 48.67% in Monday's premarket session, trading around $23.40. The reason? The telehealth company has reportedly kissed and made up with pharmaceutical heavyweight Novo Nordisk A/S (NVO), ending a bitter legal feud and, in a surprising twist, entering into a new partnership. The deal involves Novo Nordisk selling its weight-loss drugs through Hims & Hers' digital platform.
Think of it as the corporate equivalent of two rivals who were suing each other one day and announcing a joint venture the next. It's a dramatic pivot that has investors cheering.
From Lawsuit to Launchpad
The partnership follows a lawsuit over patent violations concerning compounded versions of semaglutide products. For those not steeped in pharma lingo, semaglutide is the active ingredient in Novo's blockbuster drugs Wegovy and Ozempic. Compounded versions are custom-mixed formulations that have been a point of contention in the red-hot weight-loss drug market.
By settling the suit and turning it into a commercial agreement, both companies are choosing collaboration over courtroom battles. For Hims & Hers, it means direct access to a legitimate, branded weight-loss therapy for its telehealth customers. For Novo Nordisk, it's another distribution channel in the competitive fight for market share.
This news comes on the heels of another strategic move by Hims & Hers. In February, the company agreed to acquire Eucalyptus, a leader in digital health. That acquisition is seen as a key piece for fueling Hims & Hers' ambitions for global expansion.
A Dose of Reality on Guidance
Before the market gets too carried away with the partnership euphoria, it's worth noting that Hims & Hers' recent financial outlook has been a bit of a buzzkill. The company reported fourth-quarter revenue of $617.82 million, which just missed the analyst estimate of $619.22 million. On the bright side, it beat earnings expectations, reporting 8 cents per share against estimates of 3 cents.
However, the guidance provided was less inspiring. For the first quarter, the company expects revenue between $600 million and $625 million, which is below the analyst consensus of $653.12 million. Looking further out, the company expects fiscal 2026 sales of $2.7 billion to $2.9 billion, compared to a consensus estimate of $2.74 billion. It also projected adjusted EBITDA between $300 million and $375 million for 2026.
So, while the Novo deal is a clear positive, the underlying business is signaling some near-term pressure, which management has previously attributed to factors like changes in Super Bowl ad spending and shipping cadences.
What's the Chart Saying?
The technical picture for HIMS stock is, frankly, all over the place. It's currently trading 41.6% above its 20-day simple moving average (SMA)—a sign of strong short-term momentum, especially with today's pop. But it's also 30.4% below its 100-day SMA, indicating longer-term weakness.
Over the past year, shares are down more than 54%, and they're sitting closer to their 52-week lows than their highs. The Relative Strength Index (RSI) is at 30.87, which is considered neutral—not oversold, not overbought. The MACD indicator, however, shows a value of -2.7530 with a signal line at -3.3415. Because the MACD is above the signal line, it's technically indicating bullish momentum.
In simpler terms: the stock has been in a nasty downtrend, but today's news has sparked a massive short-term rally. Key technical levels to watch are resistance at $25.00 and support at $15.00.
What Are the Analysts Saying?
The analyst consensus hasn't caught up to today's rocket launch yet. The stock carries an average "Hold" rating with a price target of $32.40. Recent actions have been cautious:
- Barclays: Overweight rating, but lowered its target price to $25.00 (Feb. 25)
- Morgan Stanley: Equal-Weight rating, lowered target to $21.00 (Feb. 25)
- Leerink Partners: Market Perform rating, lowered target to $17.50 (Feb. 24)
These downgrades largely reflected concerns about the company's guidance and competitive pressures before the Novo Nordisk deal was announced.
A Mixed Bag on Fundamentals
Assessing the company's fundamentals reveals a mixed scorecard. On Value, it's considered weak, trading at a steep premium compared to its peers. Its Growth potential is viewed as neutral, with moderate prospects in the telehealth sector. The Momentum score was bearish, reflecting the stock's very weak performance indicators over recent months—though that narrative is changing fast with today's move.
The verdict here is that the company has potential, but it's been underperforming. Today's partnership is a clear attempt to change that trajectory.
ETF Exposure
For investors who prefer getting exposure through funds, HIMS is a holding in several small-cap ETFs, including:
So, the stock's wild ride today will have a small but noticeable impact on these funds.
In summary, Hims & Hers just pulled off a classic "enemy to ally" corporate maneuver. The market is loving the surprise partnership with Novo Nordisk, sending the stock soaring. But investors would be wise to remember the company's own tempered financial guidance. It's a story of high-stakes litigation turning into high-potential collaboration, and the market is voting with a massive green arrow—for now.
