Hims & Hers stock has nosedived in the past few months. It has dived by over 56% from its highest point in July last year and is now hovering at its lowest level since April.
The ongoing slump has led to a big decline in its market capitalization from over $14.85 billion to the current $7.7 billion. So, is it a good buy as the short interest remains at an elevated level?
Hims & Hers stock short interest has soared
Third-party data shows that HIMS has moved from being one of the hottest companies in Wall Street into one of the most loathed. Data shows that the short interest has remained at an elevated level.
Seeking Alpha data places the short interest at 29%, while MarketBeat has the figure at 34%. The ongoing short-selling activity is attributed to several important issues facing the company.
For example, data shows that its insiders have continued to sell their shares in the past few quarters. They have sold shares worth over $155 million in the last 12 months. Some of the most notable sellers are Oluyemi Okupe, the CFO, Deborah Autor, a director, and Andrew Dudum, the CEO. Insiders hold a 17.7% stake in the company.
Hims & Hers stock price has also crashed because of the softness in the weight loss category, which has come under pressure in the past few months. The issue is on the sale of compounded versions of popular GLP drugs, a business that pushed its revenue to a record high.
For example, Novo Nordisk ended its partnership with Hims & Hers, accusing the company of illegal compounding. Also, the company received a warning from the FDA on claims that its compounded drugs were similar to those made by companies like Eli Lilly and Novo Nordisk. Therefore, the ongoing stock crash is a sign that investors expect the crisis to continue in the near term.
Hims & Hers stock has also cratered as investors remain concerned about its growth trajectory. The average estimate for its 2025 revenue among analysts is $2.35 billion, up by 58% from what it made in 2024.
Analysts expect that its revenue slowdown will start this year, moving to $2.76 billion, up by 17.80% from what it made last year. One reason for the slowdown is that the company slashed the price of its GLP drugs by up to 20%, a sign that its growth is slowing.
Hims management sees more grow ahead
Hims & Hers management believes that there is room for the company to continue growing in the coming years.
For one, the company aims to expand its business in other markets, including Canada, Australia, Brazil, and more European countries. It expects that the international segment will bring in over $1 billion in annual revenue over time.
The most recent results showed that Hims & Hers subscribers jumped by 25% in the last quarter to over 2.5 million, while its revenue jumped by 49% to $599 million.
Analysts expect the upcoming results to show that its revenue rose by 28% in the fourth quarter to $617 million.
At the same time, Citigroup has placed a sell rating on the company, while Weiss and Bank of America have a neutral rating. The average estimate among analysts is $45.50, up by 45% from the current level.
HIMS stock price technical analysis
The daily timeframe chart shows that the HIMS stock price has crashed, moving from a high of $70.33 in July to the current $31. It recently crashed below the key support level at $32.97, its lowest on November 24, invalidating the forming double-bottom pattern.
The chart also shows that the stock formed a death cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. It is one of the most common bearish continuation signs in technical analysis.
Therefore, the stock will likely continue falling as sellers target the next key support level at $25.
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