Stock Market Today, March 12: Hims and Hers Health Drops After Rally Sparks Profit Taking
Hims & Hers Health (NYSE:HIMS), a direct-to-consumer telehealth platform offering prescription and non-prescription health products, closed Thursday at $23.84, down 7.88%. The stock fell as traders took profits after a sharp multi-day rally driven by its new Novo Nordisk partnership and a shift in its GLP-1 strategy, and investors are watching execution on its branded obesity drugs.
Trading volume reached 68 million shares, coming in about 126% above its three-month average of 30 million shares. Hims & Hers Health IPO'd in 2019 and has grown 144% since going public.
How the markets moved today
S&P 500 (SNPINDEX:^GSPC) finished Thursday down 1.52% at 6,673, while the Nasdaq Composite (NASDAQINDEX:^IXIC) lost 1.78% to close at 22,312. Among telehealth and online pharmacy stocks, Teladoc Health (NYSE:TDOC) closed at $5.36 (-2.10%) and American Well (NYSE:AMWL) ended at $5.49 (-4.85%), highlighting broad pressure across digital health peers.
What this means for investors
Despite Hims and Hers’ bad Thursday in the markets, it’s important to remember that the company had an amazingly good week. Even after Thursday’s decline, the stock is up 50% over the last five trading days. This incredible run followed news of a partnership with Novo Nordisk for branded weight-loss drugs, an impressive earnings report, and an analyst upgrade.
That said, a longer time horizon shows a stock that is still struggling. Shares are down 27% year to date 30% over the trailing twelve months.
The longer-term stock struggles and the more recent recovery are a microcosm of where this business is at the moment. It sells products that may fall into or near the grey area around patent protections, so investors need to be aware of those risks and keep an eye on litigation and potential partnerships and agreements that could prevent or resolve legal disputes.
Jeff Santoro has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hims & Hers Health and Teladoc Health. The Motley Fool has a disclosure policy.