Hims & Hers Health is Wednesday's IBD Stock Of The Day. After returning to the IBD 50, Hims stock is making a second attempt at a breakout since late July.
The telehealth giant announced its long-awaited foray into the testosterone replacement therapy market last month. Hims says it plans to offer four options in partnership with privately held Marius Pharmaceuticals.
Leerink Partners analyst Michael Cherny notes this isn't the first time Hims & Hers Health has entered a competitive space with numerous other players. The company is best-known for its compounded weight-loss drugs, including a knockoff version of Novo Nordisk's Wegovy.
"Hims (is) likely replaying on its high touch model and existing member babes to expand products," Cherny said in a report. "Will it work? It seems likely that HIMS can penetrate its base with what seemingly is an affiliated product to areas it already treats such as (erectile dysfunction)/hair loss/weight management."
Hims stock popped more than 8% on Sept. 11, the day after unveiling its plans to enter the TRT space.
Hims Stock Attempts Another Breakout
Now, Hims stock is in a cup-with-handle base with a buy point at 60.55, MarketSurge shows. The stock is flirting with its entry, trading near 59 and above its key moving averages.
Shares tried to break out of a consolidation with an entry at 67.37 in late July. After briefly topping that buy point on July 31, Hims stock closed below that mark and continued sliding into the left side of the current cup base, eventually hitting a floor at its 200-day line.
Bullishly, shares retook their 50-day moving average last month.
Leerink's Cherny says it's unclear whether the testosterone launch can help the stock.
"It's hard to tell given how much this stock tends to ebb and flow with weight management," he said. "Shares have been strong since the formal launch, but we continue to see confusion tied to how HIMS shares ebb and flow in any short-term period."
Cherny rates Hims stock a market perform.
Hims & Hers Health In Weight Loss
In the weight-loss space, Hims & Hers continues to battle it out with Novo Nordisk.
Last month, Hims stock took a tumble after the Food and Drug Administration slammed the company with a warning letter regarding its knockoff semaglutide, the chemical backbone behind Novo's weight-loss and diabetes drugs Wegovy and Ozempic.
The letter accuses Hims of marketing its products as identical to FDA-approved drugs. Compounded drugs are not FDA approved and don't go through the same stringent testing. Hims is selling its copies based on a loophole that allows patients to seek out personalized doses of branded products. The agency said the claims are "false or misleading and your products are therefore misbranded."
But Eli Lilly and Novo Nordisk received their own warning letters on the same date, alleging the duo launched "false and misleading" advertising videos. Lilly sells the weight-loss and diabetes treatments called Zepbound and Mounjaro.
Still, even after falling nearly 6% that day, Hims stock has held onto a strong IBD Digital Relative Strength Rating of 95. This means shares have performed in the leading 5% of all stocks over the last 12 months. Hims & Hers Health has an even stronger Composite Rating of 98. The CR is a 1-99 measure of a stock's fundamental and technical measures. Hims stock ranks in the top 2% of all stocks.
Shares have risen 138% this year, as of Tuesday's close.
Upcoming Third-Quarter Report
And analysts continue to have a rosy view of Hims' growth trajectory.
For the upcoming third-quarter report, analysts polled by FactSet expect Hims & Hers Health to report $579 million in sales, up 44% vs. the year-earlier period. In comparison, sales of Novo's Wegovy are projected to climb 78% to $3.04 billion. Lilly's Zepbound is expected to generate $3.38 billion in sales, growing 172% year over year.
Hims doesn't sell compounded tirzepatide, the active ingredient behind Zepbound and Mounjaro, but it does offer the branded versions.
Analysts also project Hims will earn 20 cents per share, on an adjusted basis. Earnings would dive more than 53% year over year, however.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
