The weight-loss trade that broke Hims & Hers’ parabolic rally
2025 was shaping up to be a parabolic year for telehealth company Hims & Hers Health (HIMS) before a series of setbacks pulled the stock back down to earth.
What had been one of the market’s most explosive growth stories ultimately settled into a middle-of-the-pack performer, finishing the year only modestly ahead of the broader market.
HIMS stock ended 2025 up about 28%, a respectable gain that nonetheless masked extreme turbulence.
At its peak, following a third parabolic rally of the year, the stock surged above $66, putting year-to-date gains near 175% and positioning it as one of the standout growth names of the year.
The rally proved unsustainable.
Shares later fell by roughly half as investors began reassessing the company’s growth trajectory amid intensifying competition in the weight-loss drug market, growing regulatory scrutiny surrounding compounded semaglutide, and lingering uncertainty following the highly publicized breakdown of a partnership with Novo Nordisk.
While the Novo Nordisk dispute hasn’t resulted in litigation, the episode unsettled investors and raised questions about the durability of Hims & Hers’ expansion strategy.
Litigation may be the least of Hims’ worries
While investor concerns about an outright legal battle between Novo Nordisk and Hims & Hers have eased, Novo has applied pressure in other ways that have weighed on Hims’ stock.
In November, Novo Nordisk cut prices on its blockbuster weight-loss drugs Wegovy and Ozempic, a move that came as Hims & Hers continued to emphasize weight-loss treatments as a key growth area.
As Reuters reported at the time, the price cuts overshadowed Hims & Hers’ announcement of a share repurchase program — typically a bullish signal for stocks — and sent shares sharply lower.
The episode highlighted Novo’s outsized influence in the weight-loss drug market. As one of the world’s largest pharmaceutical companies and the dominant producer of GLP-1 therapies, Novo has far greater scale and pricing flexibility than smaller telehealth platforms like Hims.
That imbalance has increasingly been reflected in Wall Street’s outlook. Several analysts have downgraded Hims & Hers stock in recent months, including Morgan Stanley, which cut its rating to equal weight from overweight and warned of potential downside, setting a price target below $30 a share.
Hims shares are now trading not far from that level, ending the year at $32.47 after falling more than 13% over the past month.
Some investors have already acted on those concerns. Investment firm Maple Tree Capital told investors it exited its entire position in HIMS during the third quarter, citing “increased regulatory risks to the business.”