Bank of America drops shocking price target on hot weight-loss stock post-earnings

Hims & Hers Health (HIMS) has been arguably the biggest beneficiary of the weight-loss drug wave, posting record sales and backed by a booming subscriber base.

However, not everyone’s buying the growth story, with Bank of America just issuing a stark warning.

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BofA senses cracks emerging beneath the surface, revealing deeper weakness in what was otherwise a mixed Q2 showing from Hims & Hers.

Toss in the fallout in the recent fallout with Novo Nordisk, and BofA’s call starts to sound less contrarian, and more like a red flag.

Hims & Hers shares took a hit after Bank of America issued a stark downgrade.

Image source: Corbis/Getty Images

Hims & Hers rides the GLP-1 boom even without big pharma’s blessing

The weight-loss drug space isn’t just hot — it’s exploding.

According to a ResearchAndMarkets report, the worldwide anti-obesity drugs market is estimated to jump to a whopping $12.8 billion in 2025, with a compound annual growth rate of 21.1%, reaching $104.9 billion by 2035.

At the heart of it all are powerful GLP-1 therapies like Novo Nordisk’s (NVO) Wegovy and Eli Lilly’s Mounjaro, with multiple next-gen candidates in the FDA pipeline.

Evaluate Pharma’s 2025 industry preview picks GLP-1s as one of the fastest-growing therapeutic classes, with the potential to change both obesity and diabetes.

Hims & Hers, in particular, has gone all guns blazing in the weight-loss niche after solidifying its direct-to-consumer telehealth model.

For perspective, it reported $544.8 million in Q2 sales, a 73% year-over-year jump, while growing its subscriber base to 2.4 million (31% increase). Of that, $190 million came from GLP-1 prescriptions for weight loss and diabetes.

Even after the Novo Nordisk partnership debacle in June, Hims & Hers is still all-in on virtual consults and compounded alternatives in the weight-loss niche.

Bank of America says it's ‘time to exit’ Hims & Hers stock

Hims & Hers just lost a key backer, and Wall Street took notice.

The telehealth and wellness stock tanked more than 12% Aug. 5, a day after posting mixed Q2 earnings. More importantly, Bank of America analyst Allen Lutz reiterated a Sell rating and a $28 price target, implying a massive 55% downside from current levels.

“Hims delivered a mixed Q2,” Lutz wrote, “with revenue coming in below estimates but profits ahead of expectations.”

The company's sales came in at a strong $544.8 million, trailing both BofA’s $554 million estimate and Wall Street’s consensus of $551.67 million.

However, adjusted EBITDA came in at $82.2 million, beating expectations.

GLP-1 drug sales came in at $190 million for the quarter, beating Lutz’s expectations, but the analyst flagged concerns over Hims’ core telehealth business.

Lutz also questioned the impact of the company’s recent ZAVA acquisition, a European telehealth player that could potentially add $50 million in revenue during the back half of 2025.

Despite that bump, Hims kept its full-year guidance flat at $2.3 to $2.4 billion, pointing to underlying weakness.

That leaves investors with a ton of questions, which could significantly impact the company’s bull case.

These include questions surrounding GLP-1 momentum, new customer conversion, the potential for ZAVA to scale up, and whether the company can succeed in its expansion into hormone therapy and the Canadian market.

Meanwhile, Hims is still recovering from its public fallout with Novo Nordisk, which abruptly ended a short-lived partnership in June.

For context, the popular Big Pharma giant accused Hims of “deceptive marketing” and noncompliant mass compounding, a dark cloud that hasn’t cleared yet.

Novo Nordisk posts strong Wegovy sales, but risks remain

Novo Nordisk, Hims’ former partner, posted relatively strong Q2 results this week, even as it wrestles with its challenges.

Sales of Wegovy surged 67% year over year to 19.53 billion kroner ($3.03 billion), taking total sales to 76.86 billion kroner ($11.92 billion), coming in slightly ahead of expectations.

However, despite the blowout sales, Novo kept its lowered full-year forecast mostly intact, expecting revenue growth of 8% to 14% and operating profit growth of 10% to 16%.

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That said, the company’s stock is down over 40% year-to-date, with investor concerns centering on margin pressures, breakneck competition from Eli Lilly, and geopolitical troubles.

This earnings cycle also marked a CEO handoff.

Lars Fruergaard Jorgensen stepped down, handing the reins to Maziar Mike Doustdar, whose focus will be on scaling growth and navigating global demand.

For Hims & Hers, the Novo numbers are a telltale sign of what’s on the line.

Novo remains the gatekeeper of FDA-approved semaglutide, and after the public falling-out with Hims, it’s doubling down on controlled partnerships.

That leaves Hims in a remarkably tricky spot, after being effectively cut off from Big Pharma supply lines.