Hims & Hers Health (HIMS) has disclosed plans to shut down Apostrophe, its acne treatment business. This change is part of Hims & Hers’ plan to combine all its dermatology services into one main platform. By doing so, the company aims to simplify its product lineup and focus on core offerings. Following the news, HIMS stock gained 4.5% in Friday’s regular trading session.
The telehealth company had acquired Apostrophe in 2021 for $190 million to expand its skincare offerings. However, HIMS is now integrating Apostrophe’s services into its core Hims & Hers platform to achieve operational efficiency. As a result, existing Apostrophe subscriptions have been canceled.
Move Not Related to Weight-Loss Drug Market Headwind
Importantly, the closure of Apostrophe is unrelated to the recent headwinds in the weight-loss drug market, which has caused Hims & Hers stock to drop by over 45% since February 21.
This drop came after the FDA removed semaglutide, the key ingredient in Novo Nordisk’s (NVO) Wegovy and Ozempic, from the shortage list. This change raised concerns about limits on compounding pharmacies to produce these drugs, impacting telehealth providers like Hims & Hers.
Meanwhile, Hims & Hers continues to offer personalized doses of weight-loss drugs alongside nutrition and coaching plans. Also, the company is focusing on the growth of its weight loss subscriptions, and has recently acquired Trybe Labs to expand at-home lab testing services.
Is HIMS Stock a Good Buy?
Turning to Wall Street, HIMS stock has a Hold consensus rating based on four Buys, six Holds, and two Sells assigned in the last three months. At $45.08, the average Hims & Hers Health stock price target implies 25.4% upside potential.
