Hims & Hers Health Inc (HIMS) - The Wellness Hub
When rapid DTC growth meets partner risk: dissecting Hims & Hers’s 30% plunge and oversold bounce.
Just a day after plunging over 30%, HIMS staged a quick rebound—up roughly 4% today—offering a textbook oversold bounce. Here’s what drove the relief move and why it matters:
1. Fundamental Impact
Revenue hole: Morgan Stanley estimates compounded semaglutide could have made up roughly half of Hims’ projected $725 M in 2025 weight-loss revenue—implying a potential $360 M shortfall. ft.com
Margin pressure: Without Wegovy distribution and lower-cost compound sales barred, Hims faces a significant hit to gross margins and elevated cash-burn risk.
Broader risk: Regulatory scrutiny on compounding practices could trigger litigation or further enforcement actions across the telehealth sector.
2. Bounce Mechanics
Oversold extreme: RSI bottomed at ~22 yesterday before recovering to ~28 today. Stocks don’t stay that deeply oversold for long, algos and short-covering often trigger a snap-back.
MACD relief: The MACD line remains negative (−3.62) but the histogram showed shrinking red bars, signalling decelerating downside momentum.
3. Key Support Held
$40 pivot: The $40 level proved crucial. After falling through SMAs, price found buyers right above $40, buy-the-dip players and shorts covering here added fuel to the bounce.
Volume pick-up: Today’s volume of ~800 K (versus yesterday’s 4 M) confirmed selective buying into weakness, not a full reversal just yet.
4. What to Watch Next
SMA retests: Can HIMS reclaim the 100-day SMA at $43.30 and then the 50-day at $47.50? Those levels will tell us if this is a legit base or merely a dead-cat pop.
News catalysts: Any follow-up from Novo or FDA on compounding rules could reignite directional conviction.
Short-interest unwind: Check intraday borrow costs—if short rates cool, it may cap further rallies.
Bottom line: The reflex rally’s healthy but it doesn’t negate the multi-million-dollar revenue gap and partner-risk narrative. A retest of yesterday’s lows or a failure to hold above $40 would keep the bears in the game. Only a clear flip above those SMAs and fresh fundamental relief will shift the bias back toward bulls.