Short-sellers are piling into Hims & Hers (HIMS) even as the telehealth company clears legal hurdles and flashes fresh growth signals, stirring speculations that a short squeeze may be brewing.
“The HIMS shorts continue to double down,” wrote market analyst StockTrader Max on X, pointing to availability data showing millions of shares borrowed in just the past 24 hours.
The move comes right after a federal judge tossed Eli Lilly’s lawsuit against rival Willow Health over compounded drug sales.
That decision matters. It significantly lowers the risk of Novo Nordisk coming after Hims, which had cut ties with the telehealth firm earlier this year over compounded weight-loss products.
With litigation risks now looking far smaller, the bear case has lost some bite. At the same time, Hims is pressing forward, rolling out new treatments and hiring for hundreds of positions.
By most measures, that’s growth mode, not retreat. If legal hurdles keep fading away while the company launches new offerings, the sentiment could swing back the other way in a hurry.
The most hated rally on Wall Street?
Hims & Hers has turned into a battleground stock: hated by short-sellers, loved by momentum traders.
Earlier this year, Jonathan Stern of Hims House reported that HIMS was the most shorted stock in the S&P 500 MidCap 400.That kind of heavy shorting sets up the possibility of a squeeze.
Analytics firm S3 Partners has flagged the risk, noting that February’s failed short bets sent the stock exploding higher. HIMS nearly doubled that month, hitting an all-time high near $70.
Tug-of-war continues
For now, Hims is holding its own. The stock is up 84% year to date and a blistering 206% over the past 12 months, making it one of Wall Street’s top gainers.
The fundamentals help. Last quarter, revenue jumped 73% to $544.8 million, with $42.5 million in profit. That said, investors are focused on expectations, not just results.
Some balked at the sequential revenue dip from Q1, while others question whether Hims can actually deliver on its full-year guidance.
Adding to the debate, App Store rankings for the Hims app — a common proxy for subscriber growth — have fallen off a cliff, raising red flags about slowing demand.
For now, shorts and longs are locked in a tug-of-war. If legal risks keep receding and product growth holds up, Hims could again prove to be one of the market’s most dangerous stocks to bet against.
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