Hims & Hers Health recently made headlines as it explores a partnership with Novo Nordisk to sell Wegovy shots, a move that has positively influenced its stock price following a mixed third-quarter earnings report. The telehealth company generated $599 million in sales, surpassing expectations of $582 million and its own guidance of $570 million to $590 million. However, its earnings per share of 6 cents fell short of forecasts by three cents, highlighting a need for closer scrutiny.
Despite the positive sales figures, analysts are expressing caution regarding Hims’ fourth-quarter guidance, which was lower than anticipated. Michael Cherny from Leerink Partners emphasized the importance of the upcoming earnings call, stating that it will provide crucial insight into the company’s long-term growth narrative, especially given the volatility reflected in the stock performance.
In after-hours trading, Hims saw a rise of over 3%, reaching $45.88, as the market reacted to the news surrounding its potential collaboration with Novo Nordisk. For the full year, Hims has revised its sales outlook to between $2.34 billion and $2.36 billion, signaling impressive year-over-year growth of approximately 58.1% to 59.5%. Nevertheless, the fourth-quarter forecast of $605 million to $625 million has disappointed some investors, who were anticipating around $632 million.
Cherny pointed out that clearer details on the partnership with Novo are needed. The two companies have previously been at odds, particularly since Hims has been selling a compounded version of semaglutide, which is the active ingredient in Wegovy and the diabetes drug Ozempic. A past attempt at a collaborative agreement that included bundling Hims’ services with Wegovy was abruptly terminated by Novo, resulting in fluctuations in Hims’ stock price.
Conversely, Ethan Feller from Zacks Investment Research has taken a more optimistic view of Hims, noting a 21% increase in subscribers to 2.5 million. This growth reflects the rising acceptance of Hims’ personalized healthcare services. Feller believes that a deal with Novo Nordisk could alleviate uncertainties surrounding Hims’ weight loss offerings, a vital growth area for the company.
The volatility in Hims’ stock is evident, as it recently moved through a cup-with-handle base only to fall below key moving averages, triggering some sell signals. Nevertheless, Feller remains optimistic, citing Hims’ expansion into new areas, including testosterone treatments and menopause management, as indicators of a broadened addressable market.
The company’s latest results underscore ongoing growth and the potential of new verticals to drive future expansion. As Hims ventures into various healthcare segments, including weight loss and hormonal health, investors are keenly watching for developments that could reshape its trajectory in the telehealth landscape.
