Investors should consider Hims & Hers Health (HIMS) as a high-conviction growth play following its strategic partnership with Novo Nordisk (NVO) to distribute branded Wegovy. This deal effectively de-risks the company by resolving legal disputes and securing a long-term supply of both oral and injectable GLP-1 medications. While the stock recently surged, it remains fundamentally undervalued at current levels near $22.00, with internal metrics suggesting it is "dirt cheap" relative to its 35%–45% projected annual growth. Long-term investors can view any short-term "cool off" or 10% price dip as a strategic entry point into a company evolving into a subscription-based "Netflix of healthcare." This shift toward a platform-based model positions HIMS to significantly outperform conservative analyst revenue targets of $6.5 billion by 2030.

Hims & Hers Health, Inc. (HIMS)

The discussion centers on a massive single-day rally (up 40% to 50%) following a series of major announcements regarding the company’s weight loss business and its relationship with pharmaceutical giants and regulators.

• Novo Nordisk (NVO) Partnership: The speaker highlights a confirmed partnership between HIMS and Novo Nordisk regarding Wegovy. This is seen as a massive de-risking event for the company.
• Legal & Regulatory Resolution:
  • Novo Nordisk has reportedly dropped its lawsuit against HIMS.
  • The FDA is no longer "unhappy" with the company’s compounding practices, with the speaker noting that the head of the FDA allegedly congratulated both companies on the partnership.
  • HIMS will limit compounded GLP-1s to rare, FDA-compliant cases, moving toward official branded or authorized versions.
• Product Expansion: The partnership includes both oral and injectable versions of semaglutide (Wegovy). The inclusion of oral options is highlighted as a significant "big deal" for consumer accessibility.
• Valuation Metrics:
  • The speaker uses a proprietary metric: EV/GP/RG (Enterprise Value over Gross Profit over Revenue Growth).
  • Even at $21.90 - $22.00, the stock is described as "dirt cheap" with a metric of 0.09.
  • The speaker believes the stock is undervalued compared to its historical "hyped" levels and its future potential.
• Future Business Model: The speaker compares HIMS to Netflix, Spotify, or Shopify, envisioning it as an all-inclusive, subscription-based healthcare provider. This includes unlimited doctor visits, labs, cancer testing, and medications bundled into one monthly payment.

Takeaways

• Growth Projections: Current analyst estimates of $6.5 billion in sales by 2030 (requiring ~23% CAGR) are viewed as conservative. The speaker suggests 35% to 45% annual growth is possible given the new Wegovy deal.
• Short-Term Volatility: Investors should expect a potential "cool off" or profit-taking period (perhaps a 10% dip) following the massive 40%+ spike, but the long-term outlook remains bullish for the speaker.
• Market Sentiment: Despite the rally, there is still a "tremendous amount of bears" who do not believe in the "Netflix of healthcare" thesis, which the speaker views as an opportunity for long-term investors.
• Macro Resilience: The stock’s ability to rally 40% during a "poor macro backdrop" where major indices were flat or down is cited as a sign of extreme relative strength.

Novo Nordisk (NVO)

Mentioned primarily in the context of its shifting relationship with HIMS from a legal adversary to a strategic partner.

• Lawsuit Withdrawal: The reported dropping of the lawsuit against HIMS removes a significant legal overhang for both companies but specifically validates HIMS's business model.
• Distribution Strategy: By partnering with HIMS, Novo Nordisk gains access to a massive, tech-enabled subscription platform to distribute its weight-loss medications (Wegovy).

Takeaways

• Strategic Shift: This move suggests Novo Nordisk may be looking to utilize telehealth platforms as a primary growth engine for its GLP-1 drugs rather than fighting them in court over compounding.

Investment Themes & Sectors

Telehealth and "Platformization" of Healthcare

• The discussion emphasizes a shift from "transactional" pharmacy visits to "subscription" healthcare.
• Key Theme: The use of "recommender systems" (AI/Algorithms) to personalize healthcare, similar to how tech giants manage content.

GLP-1 Weight Loss Market

• The transition from "compounded" (pharmacy-made) versions of drugs to "authorized/branded" partnerships is a major theme.
• The availability of oral semaglutide is identified as a key growth driver for the sector, as it lowers the barrier for patients who are needle-phobic.

Valuation vs. Growth

• The speaker argues that the market is failing to price in the "sandbagging" (under-promising) nature of HIMS management, suggesting that revenue growth could accelerate back toward 50%.