HIMS Stock Crashes 30% in a Day: Time to Buy the Dip?

Globe and Mail

4 hours ago

Hims & Hers Health (
HIMS
) has been one of the market's standout growth stocks in recent years. The company has successfully built a direct-to-consumer health platform targeting conditions like hair loss, mental health, and more recently, weight loss—delivering very strong revenue growth and stock returns.
Shares had soared more than 150% (on two separate occasions) through the first half of 2025 before crashing more than 30% on Monday following a major partnership setback.
The selloff was triggered by news that Novo Nordisk (
NVO
) will no longer partner with Hims to supply GLP-1 weight loss drugs like compounded semaglutide. Novo Nordisk cited HIMS' use of custom-compounded versions of its weight-loss drug, along with concerns over the company's sales and promotional tactics, as reasons for ending the partnership.
While the termination of the partnership raises valid concerns for investors, Hims & Hers Health remains a fast-growing company operating in a compelling industry vertical. Below, we'll explore HIMS' business fundamentals, the broader GLP-1 industry landscape, and a tactical approach, the three-day rule, for those considering buying the stock.
Hims and Hers Stock Rallied on Strong Growth
Over the last two years, HIMS stock has been a huge gainer, though it has been accompanied by considerable volatility. Nonetheless, the company continues to enjoy some fairly compelling metrics and forecasts, especially following this large correction.
The company currently holds a Zacks Rank #3 (Hold), indicating mixed, earnings revisions over the last two month. Today, HIMS trades at 41x next year's earnings, a premium valuation, but not unreasonable for a company with such strong growth forecasts.
Earnings are expected to grow at an impressive 36.5% annually over the next three to five years, while sales are projected to rise 58.5% this year and another 22.6% next year.
Novo Nordisk and Eli Lilly Stocks Have Traded Lower
Interestingly, the GLP-1 giants have struggled over the last year. Shares of Novo Nordisk are still down more than 50% from their 2024 highs, while Eli Lilly (
LLY
) has shown more relative strength, though still well off its highs. Both stocks have faced their own challenges, including supply constraints, reimbursement questions, and competition in the obesity drug space. The outperformance of Eli Lilly and massive outperformance of Hims shows investors may favor these names.
Despite the near-term volatility, long-term projections for the GLP-1 market remain massive. Some analysts estimate the global market for GLP-1 weight loss treatments could exceed $150 billion by 2035. While the loss of the Novo partnership is a setback, Hims may still have a path to participating in this growth, either through compounding or alternative partnerships.
Three-Day Rule for Those Interested in Buying HIMS Stock
For investors considering buying the dip, the three-day rule may be worth applying here. As explained in our recent article on UNH, sharp one-day drops on unexpected news often lead to additional downside or volatility in the short term. Giving the stock a few days to settle can help reduce risk and provide a clearer entry point.
Should Investors Buy Shares in HIMS?
HIMS is now a high-risk, high-reward growth stock. The long-term outlook remains compelling given the company's strong revenue growth, expanding customer base, and exposure to major healthcare trends.
However, near-term uncertainty is high. The loss of the Novo partnership, regulatory ambiguity, and premium valuation all suggest caution. Investors may want to let the dust settle before taking a position, but for those willing to stomach the volatility, the selloff could present a long-term opportunity.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Novo Nordisk A/S (NVO): Free Stock Analysis Report
Eli Lilly and Company (LLY): Free Stock Analysis Report
Hims & Hers Health, Inc. (HIMS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).