The recent reversal on its GLP-1 product has created significant short-term volatility and a price drop in Hims & Hers (HIMS) stock to around $19.5. Despite this unprofessional "flip-flop," the long-term investment thesis of HIMS disrupting the healthcare industry remains perfectly intact. This pullback could represent a buying opportunity for long-term investors who believe in the company's core mission. Investors should look beyond the GLP-1 noise to other growth drivers like testosterone treatments, diagnostics, and future expansion into primary care. Monitor management's explanation on the next earnings call for clarity on their strategy.

Hims & Hers Health, Inc. (HIMS)

• The company recently experienced a "roller coaster" event after announcing the launch of a compounded oral semaglutide (a popular GLP-1 weight-loss drug) and then withdrawing it just two days later.
• Stock Price Impact:
  • The stock price initially went "way up" on the launch announcement.
  • It then closed "way down" and continued to fall the next day.
  • The speaker notes that even with the drop to around $19.5, they are still up over 2x on their investment.
• Sentiment: The speaker is "concerned," "confused," and views the company's quick reversal as "unprofessional" and a "flip-flop."
• Regulatory Context:
  • The core issue revolves around the legality of "mass compounding" of drugs like semaglutide by a large-scale company like HIMS.
  • The speaker is disappointed that HIMS "chickened out" of a potential legal discussion or fight with the FDA, which could have provided much-needed clarity on compounding laws for the entire industry.
  • The speaker speculates that HIMS may have withdrawn the product after back-channel conversations with the FDA to avoid legal trouble.
• Long-Term Thesis:
  • The speaker emphatically states that the long-term thesis is not broken at all and remains "perfectly intact."
  • The core long-term value is in HIMS disrupting the traditional healthcare model by:
    • Replacing the "mom and pop doctor."
    • Combining doctor visits and medication delivery in one platform.
    • Disrupting the pharmacy industry.
• Other Business Opportunities:
  • The speaker believes the market and the company are too focused on GLP-1s.
  • They wish HIMS would dedicate more energy to other promising areas where they are already making progress or have potential, such as:
    • Testosterone treatments
    • Labs and Cancer tests (noted as doing well)
    • Primary care, Diabetes, and Insomnia (areas for future growth)
  • The speaker suggests the company could focus on less controversial weight-loss drugs like generic liraglutide (an off-patent GLP-1) or metformin.

Takeaways

• Short-Term Outlook (Bearish):
  • Expect "much more volatility" in the stock price in the near term due to this event.
  • Management's "flip-flopping" on a major product launch raises concerns about their strategy and execution, which could hurt investor confidence.
  • The company now has the negative publicity and stock drop without the benefit of new sales or regulatory clarity.
• Long-Term Outlook (Bullish):
  • For long-term investors, the core thesis of HIMS as a healthcare disruptor is still valid, according to the speaker.
  • The company has multiple other growth drivers beyond the controversial GLP-1 space, including men's health (testosterone), diagnostics (labs, cancer testing), and potential expansion into primary care.
• What to Watch:
  • Investors should pay close attention to management's explanation for this reversal on the next earnings call (referred to as the "Q4 call").
  • Monitor if the company shifts its focus and communication towards its other business lines and away from the volatile GLP-1 market.
  • The speaker mentions they may "hedge" their position, indicating that even a long-term bull might consider protective measures against short-term price drops.