To The Moon

$Hims & Hers Health Inc.(HIMS)$

A massive wave of volatility hit the market this week, and Hims & Hers Health (NYSE: HIMS) found itself at the epicenter. The stock plunged more than 30% in a single day after Novo Nordisk, the Danish pharmaceutical giant behind blockbuster weight-loss drug Wegovy, publicly severed ties with the telehealth platform.

For investors, this is a defining moment—not just for the stock price in the short term, but for understanding whether this is a setback to avoid or a rare, potentially transformative buying opportunity for those with long-term conviction.

In this report, we’ll unpack:

• The full details of the Novo Nordisk announcement

• Why this development matters to Hims & Hers’ revenue mix

• The company’s underlying business performance and growth drivers

• Long-term strategic execution, guidance, and capital efficiency

• Competitive landscape and market opportunity

• Risks and volatility profile

• And finally—is this a buy-the-dip moment or a warning sign?

Let’s begin by breaking down the news that shook the stock.

Novo Nordisk Abruptly Terminates Partnership With Hims & Hers

The steep selloff began after Novo Nordisk released a statement ending its collaboration with Hims & Hers Health. The partnership previously allowed Hims & Hers to offer Wegovy, Novo’s FDA-approved GLP-1 agonist used for weight loss and Type 2 diabetes treatment, via its telehealth platform.

But Novo’s press release made it clear: they believe Hims & Hers is violating federal law by selling compounded versions of semaglutide, the active ingredient in Wegovy, even while distributing the brand-name drug. Novo claimed that the company was "conducting mass sales under the false guise of personalization", which is prohibited under existing drug compounding regulations in the U.S.

For context, compounding is a legal practice where pharmacies create custom drug formulations for patients—but they are not permitted to mass-produce those drugs as alternatives to FDA-approved medications unless there is a shortage. Novo is arguing that Hims & Hers stepped over that line.

The fallout was swift. Hims & Hers declined to give an immediate formal response to the press, but CEO Andrew Dudum posted on social media platform X (formerly Twitter), alleging that Novo’s commercial team had been pressuring Hims to direct patients exclusively toward Wegovy at the expense of other options. He framed the fallout as a philosophical and commercial disagreement over patient access and clinical autonomy.

Whatever the reason, the damage was done—at least in the eyes of Wall Street.

A Blow to GLP-1 Revenue, But Not a Death Sentence

Let’s be clear: losing the right to distribute Wegovy is not a small issue. GLP-1 drugs—such as Wegovy, Ozempic (also by Novo), and Eli Lilly’s Zepbound—have transformed the healthcare landscape by offering patients unprecedented success in weight loss and blood sugar management.

And Hims & Hers had been increasingly tapping into that demand.

But here’s the nuance that many investors might miss: Hims & Hers is far from dependent on Wegovy or GLP-1 drugs alone.

In fact, during the company’s most recent earnings report, management noted that even when all weight-loss drug revenue is excluded, Hims & Hers still delivered over 30% year-over-year growth. That figure is remarkable and demonstrates that the core business—spanning categories like mental health, dermatology, sexual health, hormone therapy, and aging care—is not just growing but accelerating.

In other words, while the headline surrounding GLP-1s grabs attention, the underlying engine of the business remains strong and diversified.

A Business Built for Recurring Revenue and High Retention

At the heart of Hims & Hers' business model is subscription-based direct-to-consumer (DTC) healthcare. With more than 2 million active subscribers as of the most recent quarter, the company benefits from recurring revenue, improving patient lifetime value, and increased customer “stickiness” over time.

This is especially true as users engage more deeply with the platform, expanding into new treatment areas. For example, a customer might first seek treatment for hair loss, but over time begin addressing mental health or low testosterone via the same ecosystem. This multi-condition engagement strategy is powerful—it boosts average revenue per user (ARPU) while improving patient retention.

The company has reported rising ARPU every quarter for more than two years—evidence that its long-term monetization strategy is gaining traction. And since customer acquisition costs are front-loaded while revenue is recurring, the long-term unit economics of the model are becoming more favorable with scale.

Execution: Ahead of Schedule, Every Time

Investors often judge early-stage companies by how well they hit their growth targets. Here, Hims & Hers has impressed.

In 2022, management outlined a multi-year roadmap of revenue and profitability goals. They ended up hitting those milestones a full year early. That track record matters—especially now that the company is forecasting $6.5 billion in revenue and $1.3 billion in adjusted EBITDA by 2030.

It’s not just blind optimism either. The company is already free cash flow positive, adjusted EBITDA positive, and operating with one of the highest ROICs in its class. In fact, its Return on Invested Capital exceeds 40%, putting it ahead of many large-cap healthcare and consumer companies that have been public for decades.

Furthermore, the company maintains strict discipline in its marketing spend. Hims & Hers aims for a payback period of under 12 months, meaning every dollar spent on acquiring a new customer typically turns profitable within a year.

A Massive Market Ripe for Disruption

The U.S. healthcare system is one of the largest—and most broken—industries on the planet. With trillions of dollars in annual spending, long wait times, high costs, and fragmented care, consumer satisfaction is abysmally low. And that’s where Hims & Hers sees its biggest opportunity.

This is not just a telehealth company—this is a company trying to redefine the patient experience by removing friction, lowering costs, improving discretion, and broadening access.

Telemedicine adoption soared during the pandemic and remains sticky post-COVID. Hims & Hers is now a household name in affordable, accessible healthcare and is well positioned as the leading consumer-first digital healthcare platform in the U.S. market.

This structural tailwind—combined with rising demand for GLP-1s, hormone therapy, mental health, and sexual wellness—could power years of revenue growth ahead.

The Bear Case: Regulatory Risk, Volatility, and High Expectations

Of course, it’s not all blue skies. Hims & Hers still operates in a heavily regulated environment. The compounded drug controversy with Novo Nordisk underscores the tightrope the company walks when it tries to innovate within legacy rules.

Any future regulatory crackdown on compounding practices or telehealth distribution could impact margins or limit product offerings.

Additionally, the stock itself is highly volatile. It has seen multiple 30% swings in either direction over the last 12 months. This is not a "set it and forget it" stock for conservative portfolios.

Finally, valuation is still a topic of debate. Even after the pullback, HIMS trades at a forward P/E of 53. That’s not cheap unless the company continues delivering 30–40% annual revenue growth and executes flawlessly.

Final Verdict: A Rare Entry Point for High-Conviction Investors

Here’s the bottom line: Hims & Hers is executing at a very high level, and the long-term thesis remains intact.

Yes, the termination of the Novo Nordisk partnership is a setback. But the company’s growth does not hinge on that one relationship. If anything, the panic-driven selloff may have opened a rare window of opportunity.

Investors willing to ride the volatility and think long term are getting a high-quality growth company with proven execution, a massive market opportunity, and a track record of overdelivering on promises.

For others—particularly those seeking stability, income, or low-risk exposure—this may still be too early to step in.

But for long-term, risk-tolerant investors? This could be one of the most compelling buying opportunities in digital health this year.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

@Daily_Discussion @TigerPM @TigerObserver @Tiger_comments @TigerClub