Barclays analyst Glen Santangelo has increased the firmās price target on Hims & Hers Health Inc. (NYSE: HIMS) to $29 from $25, while maintaining an Overweight rating on the shares. In a research note to investors, Santangelo explained that the recent rally in Hims & Hers stockāsparked by the companyās new agreement with Novo Nordiskāhighlights the incremental market opportunity created by the partnership and effectively removes a significant legal overhang that had been weighing on the stock.
According to Barclays, the market continues to underappreciate Hims & Hersā potential from new product offerings beyond the weight-loss category. The firm believes that the companyās expanded strategic positioning, reinforced by the Novo partnership, sets the stage for sustained long-term growth.
Hims & Hers Notches Record Weekly Gain as Novo Nordisk Pact Fuels Investor Optimism
Hims & Hers Health Inc. delivered its best weekly performance on record, with shares surging approximately 57% over five trading sessions, driven by renewed investor confidence following a landmark agreement with Novo Nordisk A/S. The San Francisco-based telehealth company rallied in four of the past five trading days, marking a dramatic reversal after months of legal and regulatory turbulence.
The partnership, announced earlier this week, positions Hims & Hers to sell Novo Nordiskās blockbuster weight-loss drugsāOzempic and Wegovyāon its platform, effectively ending a contentious feud between the two companies. As part of the agreement, Novo Nordisk agreed to drop a lawsuit it had filed against Hims & Hers in February. In exchange, Hims & Hers committed to ceasing its advertising of compounded versions of Novoās drugs, though it retains the ability to dispense compounded copies of Ozempic and Wegovy when prescribed by a physician based on individualized patient needs.
Analysts View Deal as a Pivotal Turning Point
Ryan MacDonald, an analyst at Needham & Co., described the agreement as a transformative development for Hims & Hers. āThis deal alleviated near-term concerns while almost putting Hims back on the right path for long-term growth with a branded partner,ā MacDonald said in an interview. He noted that investors are betting the pact with Novo will drive growth and provide a clearer strategic direction for the telehealth company, which had recently faced a series of legal and regulatory setbacks.
MacDonald emphasized that the key question now is whether the renewed partnership will prove durableāa departure from the companiesā previous collaboration, which ended in June of the prior year amid allegations from Novo Nordisk that Hims & Hers had engaged in ādeceptive marketingā practices. At that time, Novo executives had expressed concern that Hims & Hers was not sufficiently stepping back from mass marketing compounded versions of its weight-loss drugs.
A Dramatic Reversal Following a Period of Sharp Declines
The recent rally marks a stark turnaround for Hims & Hers, which had endured a punishing stretch of selling pressure. Following the collapse of the initial partnership last June, investors grew increasingly concerned about the sustainability of the companyās weight-loss business and the potential for legal exposure from Novo Nordisk. Those fears intensified in early 2025 when Novo Nordisk filed a lawsuit against Hims & Hers over the launch of a copycat version of the Wegovy pill. Although Hims & Hers swiftly removed the product from the market following regulatory threats, the damage to investor sentiment had already been done.
Compounding the challenges, Hims & Hers issued a weaker-than-expected profit outlook for the first quarter, triggering a 46% plunge in Februaryāthe companyās worst monthly drop on record. By the time the Novo partnership was announced on Monday, the stock had declined 52% year-to-date, erasing approximately $3.8 billion in market value.
āWith Novo coming back to the table and Hims sort of changing its policy on compounding, there is a more optimistic long-term future for Himsā business,ā said MacDonald, who subsequently raised his rating on the stock to Buy from Hold.
Analyst Sentiment Shifts, Though Cautious Outlook Persists
The Novo agreement has prompted at least four analysts to upgrade their ratings on Hims & Hers this week. However, despite the renewed optimism, Wall Street remains broadly cautious. According to Bloomberg data, only five of the 17 analysts covering the stock currently recommend buying, while approximately 11 maintain Hold ratings.
Citigroup research analyst Daniel Grosslight offered a measured perspective. While upgrading the stock to Neutral from Sell, he noted that the new partnership is likely to result in āa large declineā in both revenue and adjusted EBITDA, as Hims & Hers will need to scale back its mass marketing of personalized compounded GLP-1 productsāmedications tailored to individual needs through dosage adjustments or added ingredients. Nevertheless, Grosslight acknowledged that the agreement removes a significant element of risk, writing, āas such we turn more constructive.ā
Strategic Shift Toward Branded Medicines
Hims & Hers has characterized the Novo agreement as part of a broader āstrategic shiftā in how it approaches the sale of obesity drugs, particularly in light of mounting legal and regulatory scrutiny surrounding its compounding business. This week, the company also announced the hiring of Kathryn Beiser as its new chief communications officer. Beiser previously led communications at Eli Lilly & Co. for five years, bringing deep experience in the pharmaceutical and weight-loss sectors.
Navigating a Transitionary Period
According to Needhamās MacDonald, Hims & Hers is entering a ātransitionary periodā as it pivots away from mass marketing personalized compounded GLP-1s and toward selling branded medicines through its partnership with Novo Nordisk. However, key uncertainties remain.
āIf an existing personalized GLP-1 subscriber on Hims were to transition to the branded, we donāt know what the revenue or margin impact will be yet because the company hasnāt shared what the full unit economic breakdown of the relationship will be,ā MacDonald explained. āThatās the biggest variable here.ā
As the company works to define the financial contours of its new collaboration with Novo Nordisk, investors will be closely watching for signs of how the transition will affect revenue, profitability, and long-term user engagement across its weight-loss offerings.