Hims & Hers Health (HIMS) has emerged as a prominent online multi-speciality telehealth company, seamlessly connecting consumers with licensed healthcare professionals. Since its public debut in 2021, it has garnered significant attention, with highly erratic price trends that demand a certain level of courage from investors. Back in July, when the stock was trading around $23.50, we delved into this name in our column. Currently, it trades at $32.50. True to its volatile nature, the stock did not ascend in a straight line by 50% from July; it even dipped below $14 in September. Despite the volatility, we remain committed to holding this name and are considering adding to our position. After that September dip, the stock broke through the $25.50 three-year resistance zone. As long as it remains above this newly formed support zone, the potential for a double from the current level based on long-term technical projections of $65.00 remains intact.

Weight Loss Drug: A Key Driver of Headlines and Volatility

The most significant source of headlines and volatility for this modern company is their weight loss drug, which competes with Lilly's and Novo Nordisk's GLP-1 drugs. As stated on the HIMS website, "Hims & Hers offers compounded semaglutide injections, containing the same active ingredient as Ozempic and Wegovy. These compounded medications are not available over the counter; instead, they require a prescription from a licensed healthcare provider. Hims & Hers facilitates this process through online consultations, where medical professionals assess patients' eligibility for the treatment." Previously, the FDA ruled that Novo Nordisk's and Lilly's GLP-1s were in shortage, enabling compounding pharmacies like HIMS to offer a version for over-the-counter sale. Recently, the FDA removed Eli Lilly's GLP-1 from the shortage list, but Novo Nordisk's GLP-1s still remain on the shortage list, causing some confusion among investors. However, our research indicates that weight-loss drugs only account for approximately less than 10% of revenues, so their significance is not overly substantial. Even with the likely removal of the shortage classification from the FDA list, the stock is performing well. This is likely due to the other revenue channels and opportunities that the company possesses, which can drive future growth.