Hims & Hers Health Soars on Generic GLP-1 Rollout Plans

Key Points

• Hims & Hers operates a direct-to-consumer (DTC) telehealth platform for health and beauty, ED, hair loss, weight loss and non-urgent primary care needs.
• Hims & Hers reported a blowout Q1 2024 top and bottom line beat and raised the forecast for 2024.
• Hims & Hers announced they would start selling compounded GLP-1 (Semaglutide) for weight loss, a non-FDA-approved generic version of Ozempic and Wegovy.

Him & Hers Health Inc. NYSE: HIMS provides a direct-to-consumer (DTC) health and wellness platform. The company was best known for prescribing treatments for erectile dysfunction (ED) through brand and generic versions of Pfizer Inc. NYSE: PFE Viagra (Sildenafil) and Eli Lilly & Co. NYSE: LLY Cialis (Tadalafil). The company has since expanded its treatments to include hair loss, skincare, behavioral health and weight loss solutions. Shares soared on its announcement of offering compounded GLP-1 (Semaglutide) weight-loss medications at prices up to 85% cheaper than branded GLP-1 drugs like Novo Nordisk A/S NYSE: NVO Ozempic and Wegovy.

Hims & Hers competes in the medical sector with other telehealth platforms like Teladoc Health Inc. NYSE: TDOC, LifeMD Inc. NASDAQ: LFMD and American Well Co. NYSE: AMWL.

Is Compounded GLP-1 the Same as Ozempic or Wegovy?

On May 20, 2024, Hims & Hers announced they would start selling compounded GLP-1 to its members. The cost will range from $79 to $199 for injections, which is a savings of more than 80% over the brand name. The company expects the compounded GLP-1 sales to add another $100 million to its top line, especially due to the shortage of branded medications.

It's important to note that compounds, like supplements, are not FDA-approved, and there's little recourse for any damages or side effects encountered. However, the huge demand and limited supply of FDA-approved GLP-1 sets up a perfect storm scenario for the compounds. Hims & Hers can also prescribe the FDA-approved Wegovy if members qualify and require it, as LifeMD does. Incidentally, a director at Hims & Hers purchased 110,000 shares of HIMS at $17.74 for $195.2k on the day of the announcement.

 

HIMS Surges on a Bull Flag Breakout Pattern

The daily candlestick chart on HIMS illustrates a bull flag breakout pattern. The flagpole peaked at $20.11, setting up the parallel sell-off of lower highs and lower lows. The bull flag breakout occurred on the breakout through $17.42 as shares peaked at $21.44. The daily market structure high (MSH) sells trigger forms under $18.89. The daily relative strength index (RSI) peaked and fell under the 70-band. Pullback support levels are at $17.42, $15.85, $13.64 and $12.31.   

A Smashing Q1 2024 Earnings Report for Hims and Hers

Hims & Hers reported a Q1 2024 EPS of 5 cents, beating analyst expectations for a penny by 4 cents. Net income rose to $11.1 million and adjusted EBITDA rose to $32.3 million. Revenues surged 45.8% YoY to $278.2 million, beating $270.37 million consensus estimates. Subscribers rose 41% YoY to 1.7 million.

Hims & Hers Increases Q2 2024 Revenue Guidance

Hims & Hers issued upside Q2 2024 revenue guidance of $292 million to $297 million versus $288.08 million consensus estimates. EBITDA is expected to be between $30 million and $33 million, reflecting an adjusted EBITDA margin of 10% to 12%.

Full-year 2024 revenues are expected between $1.20 billion and $1.23 billion versus $1.19 billion consensus estimates. Adjusted EBITDA is expected between $120 million and $135 million, which indicates an adjusted EBITDA margin of 10% to 11%.

Hims and Hers CEO Insights

Hims & Hers Co-Founder and CEO Andrew Dudum commented, “In a very short period, I believe we have established Hims & Hers as the clear leader for accessing high-quality personalized care, and the efficiency gains we are seeing throughout our model ensure we can continue to build upon that position for years to come.”

Dudum states three underlying components driving the model, enabling them to differentiate their value proposition. They are the technology platform that enables seamless integration of structured data and direct feedback, generating valuable insights. This allows them to cater to the needs and wants of its customers. Secondly, its team of medical experts oversees the entire process with expertise across each of its core specialties. Lastly, their affiliated pharmacies help to ensure that every step, from formulation to packaging, upholds its high standards for its customers.

Hims & Hers analyst ratings and price targets are on MarketBeat.