Hims & Hers Health (NYSE: HIMS) saw its stock surge 9.5% to $37.97 in midday trading Monday after Canaccord Genuity analyst Maria Ripps lifted her price target to $40 from $32, maintaining a Buy rating. The new target implies roughly 5% upside from current levels, signaling cautious optimism as the telehealth company navigates a rapidly evolving weight-loss drug landscape.
GLP-1 Pricing and Subscription Model
The company's lowest-priced GLP-1 pill is listed at $149 per month, but patients must also enroll in a Hims Weight Loss membership—$39 for the first month, then $149 monthly. Hims emphasizes that membership does not guarantee a prescription. This subscription-based approach is central to the company's revenue model, shifting focus from bulk drug sales to recurring cash flows.
Medicare's GLP-1 Bridge Program
A fresh price point entered the market this week with Medicare's launch of the "GLP-1 Bridge" program, offering a $50 monthly copay for eligible Part D patients. The program, effective through Dec. 31, 2027, could qualify nearly 4 million people, according to KFF, though drugmakers estimate up to 20 million may be eligible. This government initiative introduces a lower-cost alternative that may pull older patients away from direct-pay telehealth services like Hims.
Employer Coverage Trends
Employer coverage for GLP-1 weight-loss drugs is showing signs of strain. Mercer reports that 5% of large companies currently covering these drugs expect to drop coverage by 2027, while Business Group on Health puts the figure at 10%. Cigna Group (NYSE: CI) is cutting coverage for its own staff starting in July. Lauren Remspecher, director at Purchaser Business Group on Health, noted that direct prices reveal "how much more they're paying," while Louis Zollo of Segal observed that "the patient population keeps growing." Workers losing employer plans may increasingly turn to telehealth options like Hims.
Financial Performance and Outlook
Hims reported first-quarter revenue of $608.1 million, up 4% year-over-year, though U.S. sales dropped 8%. Gross margin narrowed to 65% from 73%, and the company posted a net loss of $92.1 million after being profitable last year. Subscribers grew 9% to 2.584 million, but average revenue per subscriber slipped to $80 from $85. Analysts polled by Reuters project full-year 2026 revenue of $2.89 billion, rising to $3.45 billion by 2027. Raul Shah, CEO of DocShah Financial, estimates about one-third of current revenue comes from weight loss and expects that share to "continue increasing."
Strategic Partnerships and Market Position
In March, Hims announced it would add Novo Nordisk's (NYSE: NVO) Ozempic injections and Wegovy pills and injections to its platform, discontinuing compounded GLP-1 products. CEO Andrew Dudum called the deal a "new model that works for everyday people." Novo executive Jamey Millar described Hims as one of the drugmaker's most "voluminous" telehealth partners. However, Hims said it cannot estimate how the deal will affect future results.
Regulatory and Industry Developments
The peptide compounding issue remains unresolved. FDA staff recently stated there is insufficient evidence to allow compounding pharmacies to produce seven major peptides, with an advisory panel set for July 23-24. Scott Brunner of the Alliance for Pharmacy Compounding urged the FDA to find a "middle path." Meanwhile, Canaccord's analysis, citing credit-card data, shows sales growth accelerating from mid- to high-single digits in April to high teens in June.
Upcoming Catalysts
Hims expects second-quarter revenue between $680 million and $700 million, with adjusted EBITDA of $35 million to $55 million. Its full-year 2026 guidance calls for revenue of $2.8 billion to $3.0 billion and adjusted EBITDA of $275 million to $350 million. TipRanks lists the average price target at $30.05, below the current price, with a consensus rating of Moderate Buy.
