Hims & Hers Stock Soars on Novo Nordisk Collaboration

Key Points

• Hims & Hers stock rallies by over 25% on news of a collaboration with Novo Nordisk and its weight loss flagship products, and that's not all.
• Fundamentals show the company is still firing on all cylinders, and this deal will only accelerate that.
• Markets want to pay a premium in this stock for a reason, with more EPS growth ahead.

Every once in a while, investors come across some of the best names in a given industry, which then become subject to the best news and developments during a holding period. Today’s best pick seems to be in the medical sector. It shows investors a major fundamental strength that has been noticed by other major players in the industry, pushing future upside potential higher.

With a major rally of as much as 25% over the past trading week, shares of Hims & Hers Health Inc. NYSE: HIMS have become the center of attention for more buying to take place in the coming months and quarters. The recent breakout in price is attractive not only to momentum buyers but also to value investors despite the stock already trading at what some might call “expensive” valuations.

Considering that the stock did not rally from random price action but rather from a significant announcement that might change the company’s future entirely, investors can begin to justify higher valuations in stock price and traditional multiples compared to the rest of the peer group. 

Here are some factors helping markets remain bullish on Hims & Hers stock.

Novo Nordisk Collaboration Makes a Higher Ceiling

Medical industry leader Novo Nordisk announced in late April 2025 that it has chosen Hims & Hers as its newest partner to distribute its flagship weight loss drug, Wegovy. This decision not only signals confidence in Hims & Hers’ business model but also serves as a strong endorsement of the broader bullish case for the platform.

Previously, any two were blamed on the “gaps” found in the company’s GLP-1 products for weight management and weight loss, citing that the company lacked the distribution channels and size to avoid complications down the line.

Now that this new collaboration has been landed, the market has run through most of the stock's nonbelievers. This double-digit percentage rally has likely taken out some of the short sellers, as the maximum pain point is hit, forcing them to close their positions.

As of April 2025, Hims & Hers stock reported up to 33.3% of its outstanding shares being held in short positions, which is high by any means considered. That being said, a scenario calling for a “short squeeze” is viable in this case, involving a massive closing of short positions, adding to the buying pressure in the stock’s up move.

Why Hims & Hers Is Still a Buy

Some might think of an adage on Wall Street: If something hits the newswire, it is too late to get into the underlying company or trade. In the case of Hims & Hers, that doesn’t apply today. That belief can be justified by looking at some of the company's fundamental drivers.

According to the latest quarterly earnings presentation, Hims & Hers is firing on all cylinders today. When it comes to the pillar that holds everything together, users, Hims & Hers reported up to 45% subscriber growth over the past 12 months, clearly showing that the company is still in its growth spurt stages.

That user growth, reaching up to 2.2 million, allowed Hims & Hers to generate up to $1.5 billion in revenue for a net growth rate of 69% over the past year. Seeing these massive growth themes in the company can start to justify some of the bullish outlooks seen in today’s valuations, especially as there are now new catalysts for future growth.

It’s not just the growth for Hims & Hers. Up to 90% of the company's revenue comprises subscriptions, making capital management and projections almost a dream come true for value compounding and Wall Street analysts.

Speaking of analysts, this is where investors can start to gauge where the stock might go next.

The Market’s Take on Hims & Hers Stock

Because Hims & Hers now trades at 38% of its 52-week high, investors will notice a relatively low consensus price target of $36.9 per share, showing only 5.2% implied upside from where the stock trades today.

Analysts rarely look to boost or go bullish on stocks that have been underperforming or are in bearish territory.

However, when investors examine the earnings per share (EPS) forecasts, particularly the $0.16 projection for Q3 2025, it reflects a significant 77% increase from the current $0.09 EPS. Where EPS goes, so does the stock price, and this is an analyst view that cannot be swayed by price action and one that investors can lean on today.

This is perhaps why markets are now willing to pay up to 79.7x in price-to-earnings (P/E) ratios, a steep premium to the rest of the medical sector’s average 22.4x valuation. As seasoned investors will know, markets always have a good reason to overpay for certain stocks, and Hims & Hers shows enough bullish factors to justify a premium.