The market is going through an 'expectations reset' phase

Key data

Analyst consensus target

27.84

Number of analysts

15

Analyst upside (%)

15

ARPU trend

down from 85 to 80

Bank of America prior target

32

Bank of America rating

Neutral

Bank of America target

30

April CPI

3.8

April CPI estimate

3.7

March CPI

3.3

Fed June cut probability

0

Fibonacci level broken

61.8% retracement (2022-2025 rally)

Oil price

104

Price

24.14

Price change (%)

-3.56

Q2 guidance, high end

700

Q2 guidance, low end

680

Short interest (%)

30.66

Ticker

HIMS

Two-day decline (%)

-17

Wegovy orders

125000

Summary

The shares extended their slide on the second day after results, closing at $24.14 on 13 May (down 3.56%) and breaking below the 61.8% Fibonacci retracement level. The two-day decline is about 17%. BofA cut its price target from $32 to $30 (Neutral maintained). It argues that expectations must come down before the shares can get going again. Macro headwinds: April CPI rose 3.8% year on year, above expectations, the blockade of the Strait of Hormuz has pushed oil to more than $104, and the probability of a Fed rate cut in June has fallen to zero. Contrarian bull case: two bullish articles on Seeking Alpha. DocShah Financial calls HIMS 'the Netflix of healthcare' and argues that the dual partnerships with Novo and Lilly are undervalued. The 15-analyst consensus price target of $27.84 is about 15% above the current price. Near-term catalysts are limited, but short interest is high at 30.66%, so a short squeeze is possible if Q2 data show the shift to branded drugs is going smoothly.