Hims & Hers Health has formed a cup-with-handle base that offers a buy point at 60.55. The stock had surged 126% year to date, as of Monday, according to IBD MarketSurge. Hims stock is Tuesday's selection for IBD 50 Stocks To Watch.
This is an early-stage base that can net higher gains that later ones do.
Hims & Hers Health makes compounded treatments for several conditions including obesity. Compounded treatments are knockoffs that are not approved by the U.S. Food and Drug Administration. The treatments use active ingredients in branded FDA-approved drugs and are available at a lower cost.
The stock is also a telehealth play and a leader in the telehealth market set to boom and grow fourfold in the next seven years.
Hims Stock Falls Amid FDA Warning; Semaglutide Shortage Ends
Hims shares fell on Sept. 16 after the FDA issued a warning letter saying the company's website appeared to suggest that its obesity compound, a knockoff of Novo Nordisk's weight-loss drugs Ozempic and Wegovy, was FDA-approved. But the stock found support at its 50-day moving average and carved a handle in the base. Hims reportedly responded to the letter, saying it had looked forward to engaging with the FDA.
Hims stock, however, has not been able to get past a price point around 70 since February when the FDA said there was no longer a shortage of semaglutide, the active ingredient in its compounded obesity product. Earlier, branded semaglutide was in shortage, allowing Hims & Hers Health to supply its own version.
The company now offers personalized doses of semaglutide.
Hims stock ranks first in the medical-services group, according to IBD Stock Checkup. The group holds 27th place among Investor's Business Daily's 197 industry groups.
Second-quarter earnings grew 183% to 17 cents per share while sales rose 73% to $544.8 million. For the third quarter, the company's sales guidance came in at $580 million at the midpoint while for the full year, midpoint sales outlook sits at $2.35 billion.
Hims stock holds a high Relative Strength Rating of 94 out of 99. Its Composite Rating is a near top-notch 98 and shows outstanding overall performance. The Earnings Per Share Rating of 80 is adequate.
Strong Fund Ownership
Mutual funds have been buying the stock over the past 13 weeks, going by the Accumulation/Distribution Rating of A-. Funds own 58% of outstanding shares.
According to IBD MarketSurge, more funds have been net buyers of the stock in six out of the past seven quarters. Hims stock also holds an Up/Down Volume Ratio of 1.1. That shows that demand for the stock has been above average over the past 50 days.
In the IBD mutual fund index, the JPMorgan Large Cap Growth Fund (SEEGX) holds shares of Hims stock.
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