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The healthcare sector is one of the best-performing sectors in the S&P 500 over the past month, with a gain of around 6%. But while that rebound has been led by a handful of mega-cap Big Pharma companies, it has also been reflected in the performances of smaller firms.

One of those is mid-cap Hims & Hers Health NYSE: HIMS, the telehealth platform that provides direct-to-consumer (D2C) personal care products and virtual medical services.

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Over the past 30 days, HIMS is up more than 45%, which has brought the stock’s year-to-date (YTD) gain to nearly 20%. After a run like that, the stock may be due for a short-term breather. But according to healthcare industry experts, a looming catalyst could have an outsized benefit on Hims & Hers in 2027 and beyond, which is setting the stock up for a buying opportunity on its next pullback.

The GLP-1 Craze Is Pushing Up Employers’ Healthcare Plan CostsHims & Hers Health Today

HIMS

Hims & Hers Health

$38.56 +1.76 (+4.79%)

As of 03:41 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$13.74▼

$70.43Price Target$30.63

As the cost of weight-loss drugs continues to climb, Reuters recently reported that some employers are planning to drop coverage for GLP-1 treatments, including Wegovy, Ozempic, Zepbound, Mounjaro, and Foundayo—products manufactured by Novo Nordisk NYSE: NVO and Eli Lilly NYSE: LLY.

Last year, over 40% of employers covered weight loss drugs, and estimates for this year are roughly the same. But two industry groups’ analyses cited by Reuters show that is very likely to change in 2027.

According to policy research group Business Group on Health, about 10% of employers that currently offer coverage for GLP-1 drugs for weight loss said they planned to drop them in 2027. A second survey conducted by Mercer, a benefits consultancy, finds that 5% of large employers plan to drop coverage in 2027 or are actively considering doing so.

While that is unfortunate news for those undergoing treatment, it is welcome news for HIMS shareholders. Patients losing healthcare coverage for GLP-1 drugs should be a boon for Hims & Hers Health, which presently generates around one-third of its revenue from its weight-loss business.

Analysts forecast the company’s revenue to grow from an estimated $2.89 billion in 2026 to $3.45 billion in 2027, and increased subscription demand for weight loss drugs amid eroding insurance options should play a significant role in that top-line growth.

Lost coverage for GLP-1 treatments should spur a migration to D2C telehealth providers, with Hims & Hers serving as a natural destination due to its platform bundling medical provider access, unlimited clinical consultations, and pharmacy fulfillment services into one streamlined subscription.

Technical Analysis and Wall Street Suggest a Correction Is AheadWith its recurring revenue model, Hims & Hers should be a long-term beneficiary of dropped coverage. The platform charges a $39 fee for the first month of its weight loss membership. After that, the charge goes up to $149 for clinical subscriptions, not including the cost of the medication itself. Medication is billed separately, and Hims says the membership does not include or guarantee a prescription. Compounded oral options, for instance, can run $145 to more than $199 per month, while branded GLP-1 pens—like Wegovy—can run even higher.

However, following its approximately 160% gain from its YTD low on Feb. 27, HIMS appears overdue for a price correction. According to the Relative Strength Index (RSI)—a technical momentum indicator that shows if a stock is overbought (above 70), oversold (below 30), or fairly valued (somewhere in between)—HIMS has pushed into overbought territory.

As shown by the green arrow below, the RSI on HIMS one-year chart currently reads 70.86, suggesting that the stock is overbought and due for a price reversal:

Technical analysis is hardly a perfect science. But the last two times the stock’s RSI breached 70—first in mid-April then again in mid-June—HIMS pulled back more than 28% and nearly 8%, respectively, before continuing its rally.

Hims & Hers Health Stock Forecast Today12-Month Stock Price Forecast:
$30.63
-20.07% Downside

Hold
Based on 16 Analyst Ratings

Current Price$38.33High Forecast$60.00Average Forecast$30.63Low Forecast$21.00Hims & Hers Health Stock Forecast Details

Meanwhile, Wall Street remains bearish on the stock after its outperformance this year. Of the 16 analysts currently covering HIMS, only four assign it a Buy rating.

Overall, the stock receives a consensus Hold rating alongside a 12-month price target that implies over 19% potential downside from current prices.

Concerningly, with a high-volatity beta of 2.35, current short interest for HIMS now stands at more than 32% of the float, or about 65.4 million shares valued at $1.97 billion.

That is the most the stock has been shorted since March and marks a nearly 5% month-over-month increase.

At the same time, insider activity has seen an uptick in selling this year. In Q1 2026, $3.46 million worth of HIMS shares were sold with no buys. In Q2, that figure rose $4.86 million against $1.17 million bought.

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SummaryCompaniesSubscription demand to increase as insurance options erode, analysts sayRivals are seeing growing demand for oral and cash-pay optionsDrugmakers benefit from selling to Hims' user baseNEW YORK, June 25 (Reuters) - Telehealth provider Hims and Hers Health (HIMS.N), opens new tab may get a boost next year from employers dropping coverage of weight-loss drugs like Novo Nordisk's (NOVOb.CO), opens new tab Wegovy and Eli Lilly's (LLY.N), opens new tab Zepbound and Foundayo ​to rein in costs, investors and analysts say.

Soaring use of the medications has pushed up costs for employers, some of whom plan to tell employees they will ‌no longer pay for them in 2027, industry experts say.

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Instead, employees are expected to purchase direct-to-consumer products which include subscriptions from telehealth companies like Hims that bundle appointments with providers and access to the medicines.

Analysts currently estimate Hims revenue at $2.89 billion this year and $3.45 billion for 2027. Seven analysts have raised 2026 estimates for the company since May, boosted in part by its deal with Novo to sell its drugs.

About a third ​of the company's revenue comes from its weight-loss business, and it's growing, said Raul Shah, CEO of DocShah Financial, which owns less than 1% of Hims shares.

"I project ​that ratio to continue increasing as more Americans partake in the GLP-1 mania," he said, adding that he sees the U.S. weight-loss market ⁠shifting away from relying on insurance coverage.

A spokesperson for Hims and Hers declined to comment.

EMPLOYERS PUSH EMPLOYEES OFFEmployer-based plans are the most prevalent source of health insurance in the United ​States, with over 150 million Americans enrolled in them, KFF data showed.

About 43% of employers covered the drugs for weight-loss in 2025, and estimates for 2026 are about the same.

But 10% of ​employers currently covering GLP-1 drugs for weight loss said they planned to drop the drugs in 2027, according to the Business Group on Health, a policy research group for large employers.

Truist analyst Jailendra Singh said employers are directly driving cash-pay activity, through benefit guides and by advertising platforms like TrumpRx and manufacturer pharmacies. Health insurer Cigna (CI.N), opens new tab is one example, dropping coverage of the medications for its own employees.

Novo Nordisk and Eli Lilly ​offer cash-pay pricing through their pharmacies NovoCare and LillyDirect. Novo's Wegovy and Lilly's Foundayo weight-loss pills start at $149 per month for cash pay.

NOVO'S NEW PARTNERHims had become one of the ​largest U.S. telehealth providers of weight-loss drugs, even after shifting from mass compounding of alternative versions of Novo and Lilly drugs. The company missed earnings and revenue targets last quarter as it adjusted to new compounding ‌rules with ⁠the branded drugs no longer in shortage.

Hims in March announced it would partner with Novo Nordisk for its branded drugs but would continue to sell compounded versions in special doses or formulations, as regulations allow.

Jamey Millar, executive vice president of U.S. operations at Novo Nordisk, said Hims and Hers has since brought in the most volume of its telehealth partners.

Analysts said it was too early to provide estimates on how many subscribers Hims gained from the Novo deal. Hims had 2.6 million subscribers in the first quarter, up 9% from the year-ago quarter.

"Second-quarter results ​should give us a little bit more perspective ​on how many new subscribers are joining ⁠the platform and how well the weight-loss portfolio is performing," said Morningstar analyst Keonhee Kim.

The majority of Hims' revenue comes from auto-renewed subscriptions, which for GLP-1 users cost $39 for the first month and $149 for following months. That comes with access to unlimited clinical consultations but does not ​include the cost of the medication.

Hims and Hers shares closed at $32.70 on Wednesday, down more than 50% from July of 2025, when ​they reached $72.

RIVALS SEE GROWING ⁠DEMANDRival telehealth companies including Noom, Ivim Health and Ro said they anticipate demand will continue to grow as prices fall.

A spokesperson for Columbus, Ohio-based Ivim said the company has seen a 345% increase in demand for the Wegovy pill since January. Ro has said the Wegovy pill has increased demand and brought in new customers, including men.

Because Hims already has a large, recurring customer base, the company ⁠provides drugmakers with ​a more appealing footprint than smaller rivals, analysts said.

Truist estimates that about 70% to 80% of new Hims ​weight-loss subscribers renew on a monthly basis, indicating it has remained competitive.

Facing a decline in corporate coverage, drugmakers like Novo may want to target people who are already at Hims and other subscription-based telehealth programs, rather than looking ​for additional patients itself.

"Pharma knows how to sell business to business," said Rajiv Leventhal, a healthcare analyst at commerce data firm eMarketer.

Reporting by Amina Niasse; editing by Caroline Humer and Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles., opens new tab