Shares of this controversial health-care stock poised to break out to new high, according to the charts
Shares of Hims & Hers (HIMS) , a digital consumer-facing health-care company, look poised to break out to a new all time high, according to the charts. The stock came to market via a SPAC run by Howard Marks’ Oaktree Capital Management in October 2020. The shares initially cratered along with many of the SPAC-originated publicly listed companies, but has since regained its footing and catapulted back towards all-time highs. HIMS announced in May a controversial weight loss injection product to compete with Lilly’s Ozempic and Novo Nordisk’s Wegovy. We’ve recently added this name to our holdings in the growth portfolio at Inside Edge Capital. HIMS is not only marketing weight loss drugs, it has over one million subscribers using a wide variety of treatments. These include mental health treatments, hair loss serums, dermatology cosmetics, and a wide range of sexual wellness products. It’s no secret that the total addressable market for weight loss drugs is gigantic. In a recent note, Goldman Sachs increased Eli Lilly’s global sales of their GLP-1 drug from $100 billion to $130 billion through 2030. HIMS is using an FDA loophole called ‘compounding’ to distribute their GLP-1 injection over the counter as there are shortages of the active ingredients in Lilly’s and Novo’s prescription products. Here’s the kicker; HIMS is selling a monthly membership for the drug at an 85% discount to its competitors. Turning to the daily chart, we can see the boost from the prior three earnings reports, along with the news announcement of their weight loss GLP-1 drug. he volume was massive that day at over 70 million shares traded with average daily volume at round 18 million. The next earnings announcement is August 5th and we think the earnings and guidance should be sufficient to break this stock to new all-time highs targeting $35. Even at that higher price, we think the valuation is still reasonable at 44 times 2025 earnings in such an explosive growth segment of healthcare. -Todd Gordon, founder of Inside Edge Capital, LLC DISCLOSURES: ( Gordon owns HIMS personally and in his wealth management company Inside Edge Capital.) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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