Hims & Hers stock price has greatly performed this year as it continued to disrupt the healthcare industry. HIMS has jumped by almost 200% this year, while other companies in the industry like CVS Health and Walgreens Boots Alliance and CVS Health, plunged. So, will the stock have more upside in 2025?
HIMS stock fell after a key FDA ruling
One reason why the Hims & Hers stock price surged has been its entry into the weight loss industry, where it offers quality drugs at a lower cost.
This business may be under pressure soon, which explains why the stock has crashed by more than 25% from its highest level this year.
In a statement last week, the Food and Drug Administration (FDA) warned that it was concerned about many weight drugs being sold in the market. In particular, it expressed concerns about compounded drugs, which it said were not approved.
The FDA noted that it had received adverse events related with compounded semaglutide and tripeptide. Therefore, it is likely that Hims & Hers business will be affected because the weight loss segment is one of its fastest-growing segments.
The company is seeing strong growth
Hims & Hers stock price surged this year as its business continued doing well because of its large total addressable market. As we have written before, its top markets like weight loss, hair loss, anxiety, and sexual health have a large total addressable market. For example, a report by Oxford noted that over 25% of men in the United States had an erectile dysfunction problem.
Estimates are that millions of Americans have weight issues. According to the CDC, about 9.4% of all Americans had an obesity problem. Also, more people are now more comfortable buying these drugs online, which was not the case a few years ago.
These trends explain why the Hims stock price has done well in the past few years. Its annual revenue stood at just $82.6 million in 2019, making it a fairly small company. Recently, however, its revenue has soared, hitting over $872 million in 2023 and $1.2 billion in the trailing twelve months.
The most recent results showed that the Hims & Hers revenue jumped by 77% YoY to over $401.6 million. Analysts expect that this growth is just starting, with the current quarter’s revenue rising by 90% to over $469 million.
The average estimate is that Hims & Hers annual revenue will get to $1.45 billion this year, followed by $2.03 billion in 2026. This trend makes it one of the fastest-growing companies in the healthcare industry.
Hims & Hers is seeing profitable growth. The average estimate is that its EPS will be 22 cents in this quarter, up from $0.05 a year ago. Its annual EPS will move to 8 cents this year, followed by 93 cents in the following year. This growth will help the company justify its high valuation, with its market cap standing at over $5.7 billion today.
Hims & Hers stock price analysis
The daily chart shows that the HIMS share price peaked at $35 in November. As we predicted, it erased some of those gains after the FDA ruling.
The stock’s retreat has seen it retest the important support level at $25.75, its highest swing on June 17. This pattern is known as a break and retest, and is one of the most bullish continuation signs.
The stock has found support at the 50-day Exponential Moving Average. Therefore, there are odds that the stock will bounce back soon and retest the important resistance point at $35, the year-to-date high. A drop below the support at $22 will invalidate the bullish view.
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