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HIMS

Back-to-back double-digit surges, sell-side consensus cut, overbought warning

Sources (3)

HIMS on 20 Jun: the shares rose another 11.23% on Friday 19 Jun to close at $35.47, straight after an 11% gain on Thursday 18 Jun. That makes two consecutive double-digit sessions and a gain of about 23% for the week.

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The main driver is still sentiment around the Novo Nordisk partnership (a wider distribution network for Wegovy and Ozempic), with no new fundamental catalyst. The divergence is extreme: the average target of 14 analysts was cut the same day from $28.37 to $28.18, implying about 21% downside. The price is now above most analysts' targets, and even Barclays's $39, the most aggressive, leaves only about 10% upside. On 19 Jun CNBC put HIMS on its list of the 'most overbought this week' (14-day RSI above 70). This leg up is driven by sentiment and a short squeeze (short interest is still about 42% of the float, and mounting paper losses are forcing shorts to cover), not by results. The real binary event is still the FDA peptide meeting on 23-24 Jul.

Key evidence

  • Closed at $35.47 on 19 Jun (+11.23%), straight after +11% on 18 Jun: two consecutive double-digit days
  • Up about 23% this week
  • Main driver of the rally: sentiment around the Novo Nordisk partnership (a wider distribution network for Wegovy and Ozempic)
  • No new fundamental catalyst
  • The average target of 14 analysts was cut the same day from $28.37 to $28.18 (range $21-39)
  • Implies about 21% downside
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  • Follows the 125.7% cut to consensus EPS reported by Zacks on 11 Jun
  • The price is above most analysts' targets, and even Barclays's $39, the most aggressive, leaves only about 10% upside
  • CNBC put it on its 'most overbought this week' list on 19 Jun
  • 14-day RSI above 70
  • Expected trading range $31.44-39.50
  • Short interest is still about 42% of the float: a short squeeze is forcing shorts to cover

Catalysts to watch

  • FDA peptide meeting on 23-24 Jul: the real binary event
  • The next round of sell-side target updates
  • Execution of the Novo Nordisk partnership (distribution penetration and prescription data)
  • Pace of short covering, with about 42% of the float sold short

Risks

  • Risk of a short-term pullback from overbought technicals: historically, an RSI above 70 has often preceded a pullback
  • An extreme gap between the sentiment-driven rally and sell-side fundamental expectations, with the sell-side consensus being cut in the opposite direction
  • The price already discounts a great deal of optimism, so chasing it is high-risk
  • If the 23-24 Jul FDA peptide meeting goes badly, the binary outcome is to the downside
  • The 125.7% cut to Zacks consensus EPS shows fundamental earnings expectations are actually deteriorating

Sources 3

  1. TradingView News, 19 Jun: attribution of the move and 12-month price target updates
  2. CNBC, 19 Jun: 'most overbought this week' list
  3. Zacks consensus EPS revisions, 11 Jun

A brief is a lead for our research, not a verified conclusion or advice.