To The Moon

Yesterday, there was a negative report from the Wall Street Journal on $Hims & Hers Health Inc.(HIMS)$  might be the final blow to the share price. Mark Millich’s ordeal shines a light on a concerning issue: the ease of accessing finasteride via telehealth services like Hims. At just 26 and battling insecurities over his thinning hair, Millich sought a quick fix through an online platform. After answering a short 14-question survey—without ever speaking to a doctor—he was prescribed finasteride, a drug that works by inhibiting DHT production to treat male pattern baldness. Unfortunately, the outcome was far from what he had expected.

Shortly after starting the medication, Millich experienced a range of alarming symptoms: anxiety, dizziness, and slurred speech, which he described as feeling “lobotomized.” His condition worsened, with a dramatic drop in libido and disturbing physical changes, including genital shrinkage and alterations in shape. His doctor linked these side effects to finasteride, a conclusion supported by his wife, Marie Linne von Berg, who noted how profoundly the situation disrupted their lives. These issues are consistent with known side effects of finasteride—such as sexual dysfunction and neurological or psychological symptoms like anxiety or cognitive fog—which, in rare cases, can persist even after stopping the drug (a condition sometimes referred to as post-finasteride syndrome).

The simplicity with which finasteride can be obtained through Hims raises serious oversight concerns. Telehealth platforms often emphasize convenience—Millich received his medication within days based on a brief questionnaire—but this process can sidestep the detailed risk assessments a face-to-face consultation would provide. Although studies suggest that only 1-10% of users experience significant side effects, such risks can be particularly severe for younger men who might not fully anticipate the hormonal changes involved. While Hims asserts that licensed providers review its intake process, the absence of direct doctor interaction left Millich unaware of the potential dangers.

This incident reflects a broader trend: with telehealth services on the rise, finasteride prescriptions have surged nearly 200% in recent years. For Millich, the hope of thicker hair quickly turned into a cautionary nightmare—a stark reminder that quick fixes may come with hidden, serious risks.

1. Stock Price Movement Overview

Initial Surge:

The stock opened at approximately $47.80 on February 12, 2025, and then surged to a peak of $68.65 by February 19, 2025. This represents roughly a 43.6% increase in less than a week, suggesting an aggressive bullish phase driven by strong market sentiment or positive news.

Subsequent Correction:

Shortly after the peak, the stock experienced a steep decline, falling to $31.65 by March 13, 2025. This dramatic drop—over 50% from the high—indicates a significant market correction or profit-taking phase.

Recent Activity:

On March 14, 2025, the stock closed at $32.175, marking a slight recovery from the previous low. While the recovery is modest, it may signal an attempt to stabilize the price or the formation of a technical support level.

2. Volatility and Trends

High Volatility:

With a beta of 4.37 and a weekly volatility of 8.63%, HIMS is characterized by extreme price swings. Such a profile is common in stocks that are subject to rapid shifts in market sentiment or are influenced by news events.

Technical Analysis:

The report mentions a "double bottom" formation around March 5 and an accumulation of volume in the $30-$32 range. These technical indicators suggest that this price range might serve as a critical support zone, potentially providing a floor for the stock if buying interest increases.

3. Contextual Factors

Earnings and Guidance:

HIMS reported strong Q4 2024 results—with revenue growing by 95% to $481M and subscribers increasing by 45%—which initially buoyed investor optimism. However, concerns regarding gross margins and dependency on GLP-1 revenue (especially after regulatory changes like the FDA's removal of semaglutide shortage status) led to a notable after-hours drop in the stock price.

Market Sentiment:

The initial positive reaction to the earnings report was quickly overshadowed by profit-taking and regulatory uncertainties. Social media and web analyses referred to the upward surge as a "parabolic balloon" and then highlighted the subsequent sell-off, reflecting mixed investor sentiment.

Fundamentals and Growth:

Despite the recent downturn, HIMS reported impressive underlying metrics, including $1.5B in revenue for 2024 (a 69% YoY increase) and a net income of $126M. The guidance for FY25 indicates continued growth potential, partly driven by non-GLP-1 revenue streams. This suggests that while the GLP-1 segment faces challenges, the overall business remains robust.

4. Potential Turnaround Analysis

Short-Term Outlook:

The slight uptick to $32.175 on March 14 may indicate the beginning of a recovery, provided that the stock can stabilize above this support level. Breaking through resistance levels in the $35-$40 range could be pivotal for reversing the bearish momentum.

Long-Term Considerations:

HIMS’s diversified product portfolio (including telehealth services beyond weight loss) and impressive revenue growth present a compelling case for long-term recovery. If the company can effectively address the GLP-1 regulatory challenges—perhaps through strategic acquisitions or product diversification—the stock may regain upward momentum.

Challenges to Overcome:

Continued regulatory and competitive pressures, especially from major industry players like Novo Nordisk and Eli Lilly, remain significant risks. Investor sentiment may remain cautious until there is clear evidence of strategic adjustments and improved profitability margins.

5. Conclusion

The report paints HIMS as a high-volatility stock that experienced a dramatic rise and fall within a short period. While strong earnings and revenue growth underscore its long-term potential, immediate challenges such as regulatory headwinds and profit-taking have weighed on its short-term performance. The identified technical support around $30-$32 is critical—if maintained, it could form the basis for a turnaround. However, significant hurdles remain, and the stock’s future trajectory will likely depend on both improved market sentiment and strategic moves to mitigate competitive and regulatory risks.

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