Why Hims & Hers Stock Tumbled on Tuesday

Hims & Hers Health (NYSE: HIMS) stock slid 7.4% through 11:10 a.m. ET Tuesday after Bank of America raised its price target on the pharmaceuticals stock in the worst way possible.

BofA added only $1 to its Hims & Hers price target, making it $22 a share.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Which is actually $10 less than Hims & Hers stock is worth today.

What BofA thinks about Hims & Hers

Bank of America also reiterated that it thinks Hims & Hers stock is a sell, by the way, or as the banker puts it, an "underperform."

Explaining its reasoning in a note on The Fly this morning, BofA noted that GLP-1 sales growth is accelerating, rising 124% year over year in February, and accounting for 45% of Hims & Hers' total revenue that month. That's good enough for an extra $1 worth of price target, apparently -- but not good enough to get BofA to buy the stock.

Why not?

Well, BofA didn't say exactly, but as I argued yesterday, February's spike in sales owed primarily to heavy advertising Hims & Hers undertook during the Super Bowl last month. And yet, Hims & Hers cannot expect to continue enjoying similar levels of sales of its GLP-1 products, because the FDA is rolling out declarations that GLP-1 deficits are ending, and with them, the need to allow drug compounding companies like Hims & Hers to produce duplicates of the patented drugs of companies like Eli Lilly and Novo Nordisk.

What this means for Hims & Hers Health stock

Long story short, the windfall profits Hims & Hers enjoyed in quarters past are going away, and that's going to pose a headwind to further growth.

The question now is whether Hims & Hers stock costing 65 times trailing earnings is still worth buying, if growth is going to slow. Bank of America doesn't seem to think it is, or at least, not at the current stock price. If Hims & Hers stock drops into the low $20s, though, that answer may change.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $309,972!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,573!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $512,338!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 18, 2025

Bank of America is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.