Short interest totalled about $1.39 billion, or roughly 42.83% of the float, according to S3 Partners.
- Citigroup upgraded the stock to 'Neutral' with a $24 target, and Needham upgraded to 'Buy' with a $30 target.
- Morningstar maintained a cautious view, keeping a $23 fair value estimate and calling the shares "fairly valued" after the recent rally.
- FDA Commissioner Marty Makary welcomed the deal, saying Hims offers approved treatments through the Novo deal, while keeping medications affordable.
Shares of Hims & Hers Health, Inc. (HIMS) posted their biggest gain ever on Monday after the company renewed a partnership with Novo Nordisk, triggering a surge that wiped out roughly $546 million in short-seller bets and forced Wall Street to reassess the telehealth firm’s growth outlook.
HIMS stock surged 41% on Monday to end at $22.16, but dipped slightly in extended trading.
HIMS Gains Analyst Support After GLP-1 Deal
Citigroup upgraded Hims & Hers to 'Neutral' from 'Sell' and raised its price target to $24 from $13.25, implying a 7% upside from the stock’s last close. The bank said the renewed partnership with Novo Nordisk “significantly de-risks” the company and pointed to Novo’s decision to drop its patent infringement lawsuit, which it said removes a major legal overhang.
Meanwhile, Needham upgraded the stock to 'Buy' from 'Hold' with a $30 price target, suggesting a 34% upside from current levels. The research firm said its previous Hold rating had been based on Hims & Hers being boxed out of the weight-loss market, but now believes the Novo Nordisk partnership fundamentally changes the company’s weight-loss business and overall growth algorithm, according to an Investing report.
Needham added that the deal could unlock stronger demand tied to Novo’s blockbuster GLP-1 drugs, particularly as medications such as Wegovy are often purchased through cash-pay channels that are not fully reflected in the company’s outlook.
Research firm Morningstar took a more cautious stance, maintaining a $23 fair value estimate, which implies about 3% upside from the latest close, while calling the shares “fairly valued” following the sharp rally and noting that uncertainties around the renewed partnership remain.
Short Sellers Feel The Pain
The stock’s surge also triggered massive losses for short sellers. According to a post on X by Ihor Dusaniwsky, managing director at S3 Partners, traders betting against the stock lost about $546 million in mark-to-market losses in a single day as the rally forced pressure on bearish positions.
Dusaniwsky said Hims & Hers currently has about $1.39 billion in short interest, representing 87.94 million shares, or 42.83% of the stock’s float. However, bearish traders remain up about $757 million so far this year.
Short sellers have now lost roughly $258 million over the past 30 days. “These daily losses may trigger squeeze-related short covering in this heavily shorted stock,” Dusaniwsky added.
Novo Nordisk Deal Resets Hims GLP-1 Strategy
The rally followed Hims & Hers’ announcement of a new deal with Novo Nordisk, which will allow the telehealth platform to distribute several FDA-approved GLP-1 treatments. Under the agreement, the company will offer Novo’s Ozempic injections and Wegovy pills and injections through its platform starting later this month as part of a broader strategy to focus on branded, FDA-approved medications.
Additionally, Hims said it will stop advertising compounded GLP-1 drugs, though it plans to continue offering them for a limited set of patients if a provider determines a compounded product is clinically necessary.
Novo Nordisk withdrew its patent infringement lawsuit against the company, removing a dispute that had escalated over the past few months after Hims signaled plans to offer a copycat version of Novo’s weight-loss pill.
FDA Commissioner Welcomes Deal
Marty Makary, commissioner of the U.S. Food and Drug Administration (FDA), welcomed the deal on X, saying, “Glad to see HIMS will stop advertising unapproved compounded drugs and instead sell FDA-approved products through its new partnership with Novo Nordisk.”
Makary added that the agreement keeps medications affordable while limiting compounded GLP-1 use to rare cases that comply with FDA guidelines.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment was ‘extremely bullish’ amid ‘extremely high’ message volume.
One bullish user noted that “shorts reloaded for another opener attack tomorrow. It's do or die for them starting tomorrow.”
Another user said, “There's no downside now.. FDA risk, Litigations, can sell NOVO products, purchase of Eucalyptus, a round of rating upgrades no doubt. As there's no need to short, shorts will start to close positions. “
HIMS stock has declined 32% year-to-date.
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