Morningstar

Hims & Hers: Repartnering With Novo Removes Legal Overhang and Reshapes Weight Loss Segment

We now view Hims stock as fairly valued.

Collage illustration for Healthcare Sector with a pill bottle.
Securities in This Article
Hims & Hers Health Inc Ordinary Shares - Class A
(HIMS)
Novo Nordisk AS ADR
(NVO)

Key Morningstar Metrics for Hims & Hers Health

  • Fair Value Estimate
    : $23.00
  • Morningstar Rating
    : ★★★
  • Morningstar Economic Moat Rating
    : None
  • Morningstar Uncertainty Rating
    : Very High

Hims & Hers HIMS said it is reconvening its partnership with Novo Nordisk NVO and will sell Novo’s FDA-approved treatments for diabetes and obesity on the Hims platform. Novo’s patent infringement lawsuit against the firm has been dismissed, and Hims shares are up 40% in March 9 trading.

Why it matters: Hims and Novo have had a tumultuous year. The firms announced a 2025 collaboration that was terminated after less than two months. This year, Hims announced plans for a copycat version of Novo’s new weight-loss pill, whereupon Novo launched a patent infringement lawsuit.

  • We believe much of the market’s positive reaction to the March 9 news centers on the elimination of the legal overhang that has buried Hims shares over the last month.
  • In connection with Novo dropping its lawsuit, Hims will no longer advertise compounded GLP-1 medications, instead promoting FDA-approved versions like Ozempic and Wegovy. Hims said only a limited set of customers will retain access to compounded drugs for special circumstances.

The bottom line: As details remain murky and uncertainties surrounding round two of this partnership still exist, we maintain our $23 fair value estimate for no-moat Hims and view the shares as fairly valued following market gains.

  • Given the strategic shift in Hims’ weight-loss strategy, we forecast slightly higher near-term revenue for the segment, driven by an uptick in sales for oral branded GLP-1s. However, we believe short-term margins will be marginally weaker. Taken together, this has an immaterial effect on our estimate of intrinsic valuation.
  • The dynamics of this pivot are unclear, and we are interested to see how Hims’ transition away from compounding unfolds. The press release arguably leaves the door open for patients to remain on compounded drugs, but Novo can always refile its lawsuit if their usage doesn’t significantly decline.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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