To The Moon

$Hims & Hers Health Inc.(HIMS)$ 🔥📉📈

🤖🚨⚡ $HIMS, Fire Sale or Buy the Dip Opportunity? ⚡🚨🤖

$HIMS plunged 25.79 percent to close at $49.28 ahead of Monday’s earnings. The stock is now hovering near the critical $47 gap fill level, a technical fulcrum that could signal either a sharp rebound or deeper declines.

📉 What’s Pressuring $HIMS?

FDA Decision: The FDA has removed Ozempic and Wegovy from its shortage list, which could reduce demand for Hims & Hers’ weight loss services. Compounding pharmacies now face a 90 day cessation window for producing compounded versions, potentially impacting prescription volumes for HIMS.

Analyst Sentiment: Morgan Stanley’s downgrade sparked the heavy sell off, fuelling the steep intraday drop. However, not all analysts are bearish. Jefferies has maintained a Buy rating with a price target of $65, citing long term growth potential despite near term headwinds. Meanwhile, Goldman Sachs has placed HIMS on its “High Risk, High Reward” watchlist, pointing to potential upside if Monday’s earnings beat expectations.

Regulatory Risks: Concerns over Trump’s proposed cuts to telehealth funding have raised sector wide alarms. Reduced subsidies could squeeze margins for telehealth providers, with Hims & Hers particularly exposed due to its reliance on virtual consultations.

 Technical Analysis and Investor Behaviour

Capital Flows: Recent data shows a near even split between inflows and outflows, highlighting investor indecision ahead of earnings. The turnover rate hit 46.5 percent, suggesting heightened volatility as short sellers and momentum traders drive price action.

Bid Ask Spread: The post market spread sits at $49.45, $49.59, hinting at some stabilisation, though thin volumes suggest further swings are possible.

Support and Resistance Levels: The $47 gap fill remains the key level to watch. A bounce here could see a recovery towards the $55 to $57 range, while a breakdown could lead to a test of the $42 to $45 zone.

Short Squeeze Potential: With short interest on the rise, a strong earnings beat could trigger a short squeeze, fuelling a rapid move higher, especially given the recent volatility.

🧾 Earnings Expectations, Acquisitions, and Broader Market Context

Upcoming Earnings (Monday): The report will be pivotal. Analysts expect $180 million in revenue with EPS projected at $0.05. Investors will focus on subscription growth, retention rates, and forward guidance.

Another Acquisition: HIMS has just announced another acquisition, which has sparked mixed reactions. Investors are concerned that the acquisition could increase the company’s debt ratio and potentially reduce short term profits. This makes Monday’s earnings report even more crucial.

What to Watch For:

1. Confirmation of Investor Worries: The earnings report might confirm fears that the new acquisition will weigh on the company’s balance sheet, leading to further selling pressure.

2. Moon Shot Potential: Alternatively, if the report highlights strong synergies and future growth, similar to CELH’s breakout earnings, it could trigger a moon shot 🚀 and send the stock soaring.

Sector Trends: The telehealth sector has been under pressure, with peers like Teladoc (TDOC) also seeing declines. Regulatory uncertainty and competition continue to weigh on the industry.

Company Specific Developments: Hims & Hers recently partnered with Peloton, aiming to diversify its offerings and attract new customers. While the long term impact is uncertain, it shows the company’s effort to expand beyond traditional telehealth.

💡 🔥 Fire Sale or Buy the Dip? 📉

With so many moving parts, Monday’s earnings will be the defining moment. Will $HIMS confirm investor concerns, or will it deliver a surprise beat that sparks a rally back towards $66

📊 $HIMS Options Data Breakdown (19 Feb 25)

+ Buying (Calls) = + Deltas being added

This means that traders are aggressively purchasing call options, which increases the delta exposure. Delta measures how much an option’s price is expected to move relative to a $1 move in the underlying stock. As more calls are bought, it adds positive delta, making the options market more bullish.

Drives IV Up

Increased call buying leads to a rise in implied volatility (IV). More demand for calls inflates option premiums, making it more expensive to buy new options and indicating heightened expectations of future price movement.

Other Side (Sellers) = Negative Delta

The traders or institutions selling these calls now have negative delta exposure, meaning they are effectively short the stock via options. To hedge this risk, they often need to buy the underlying equity or additional calls, creating buying pressure on the stock itself.

🔑 Open Interest and Volume on Key Call Options

   •   28 Feb 75C – $2.62M in volume

   •   7 Mar 70C – $2.82M in volume

   •   28 Feb 70C – $1.54M in volume

   •   18 Feb 95C – $1.77M in volume

   •   28 Feb 50C – $1.85M in volume

🔍 What Does This Mean?

This data highlights significant bullish positioning in $HIMS through heavy call buying. The large volumes on strike prices between $50 and $95, especially for near-term expirations (28 Feb, 7 Mar), suggest that traders are betting on a short-term rally or increased volatility around the upcoming earnings event.

The increased IV and positive delta flow could lead to a gamma squeeze if the stock starts moving upward, forcing market makers to buy more stock to hedge, which in turn drives the price higher.

Overall, the option flow indicates growing speculative interest and the potential for sharp price movements in the short term, particularly around key catalyst events like earnings.

This is what to keep in mind, are you buying the dip or waiting for Monday’s verdict? 🤔📉🚀

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