Hims & Hers Health Shares Skyrocket in Novo Nordisk Deal, but Is the Stock Still a Buy?
Shares of His & Her Life (NYSE: HIMS) increased significantly after the telemedicine field reached an agreement with it Novo Nordisk (NYSE: NVO) selling the manufacturer’s popular GLP-1 weight loss drugs. The question on many investors’ minds is whether it is too late to buy the stock. Let’s take a closer look.
Hims & Hers and Novo Nordisk have had a tumultuous relationship over the past few years. The companies formed a short-term commercial relationship last year, until Novo Nordisk walked away, saying that Hims had not reached an end of the bargain by continuing to sell illegally compounded drugs under a personal guise.
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Hims was able to legally sell compounded drugs when semaglutide, the main ingredient in the drugs Novo Wegovy and Ozempic, was in short supply. However, the FDA announced that the drug was no longer in short supply by February 2025. Hims has long argued that it has the legal right to sell personalized versions of the drug and that it is safe for patients. At the time of the split, the company said Novo Nordisk was pressuring it to sell its brand of drugs and would not be “strongly armed.”
The two companies later entered into negotiations to sell Wegovy last November, as Novo Nordisk introduced a new pill form of the drug. However, the deal fell through, and Novo Nordisk sued Hims in February of this year after the health company announced plans to sell a cheaper version of the Wegovy pill. While Hims said its personal dose version could help better manage side effects, the FDA began cracking down on compounding drug companies over weight loss drugs, leading Hims to stop selling a copycat version of the Wegovy pill.
As such, the new deal with Novo Nordisk surprised investors. Hims will now offer Ozempic injections and Wegovy tablets at its location. It will still offer certain personalized semaglutide medications to patients when medically necessary, but will no longer advertise this option on its platform or in its marketing. Meanwhile, the case will be cleared.
The agreement with Novo Nordisk and the end of the lawsuit removes one of Hims’ biggest conflicts. The fact that Novo Nordisk was willing to return to the company further demonstrates the reach of Hims’ platform. This should help drive growth, although it will come at a lower overall rate.
Even after its jump in stock price, Hims isn’t cheap, trading at less than 20 times forward earnings based on 2026 analyst consensus and less than 15 times based on 2027 estimates. It’s still growing fast, with revenue up 28% last quarter, and has strong potential for international expansion ahead. However, given the strained nature of its past relationship with Novo Nordisk, investors should not overdo the stock and should only consider small positions. However, if the deal sticks, there could be long-term ramifications ahead.
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool ranks and recommends Hims & Hers Health. The Motley Fool recommends Novo Nordisk. The Motley Fool has a policy of disclosure.
Hims & Hers Health Shares Skyrocket in Novo Nordisk Deal, but Is the Stock Still a Buy? was first published by The Motley Fool
