Ozempic Boom: Hims & Eli Lilly Lead Healthcare Bets

Most investors have noticed that most stocks in the healthcare sector have declined to levels not seen in a while, making this an area of interest for those looking into the next potential upswing in their portfolios. However, for those who are okay with individual stock picking and taking on a bit more risk, there is one narrative to follow in the coming months.

That narrative is the Ozempic wave, a weight loss treatment that has reached millions of American households over the past couple of years and an industry that shows no signs of slowing down despite recent regulatory interference and accusations.

The data has been available long enough to demonstrate that people like the product and have achieved the desired results.

This is exactly where companies like Hims & Hers Health Inc. (NYSE: HIMS) and Eli Lilly and Co. (NYSE: LLY) come into play, as these two are directly exposed to Ozempic and weight loss sales in their own way. Before investors dig into the upside and stability offered by distinguishing these two, a worthy mention of the Health Care Select Sector SPDR Fund (NYSEARCA: XLV) should be made first as another diversified way to get into this race.

Why Diversification Matters Here

With new drugs and health care products like Ozempic, there are going to be (as usual) a lot of speed bumps along the road to success and market adoption, which is why diversifying bets across different companies is of utmost importance for those investors who are okay with getting less performance in exchange for increased stability and protection.

Considering where the Health Care Select Sector SPDR Fund trades at today, showing a performance gap of roughly 26% compared to the broader S&P 500 index, it is very clear that the entire sector poses as a potential value zone for investors who aren’t too comfortable betting into one stock for this Ozempic narrative.

That being said, an inevitable rotation is likely to benefit this ETF in the future, as growth prospects shift and sentiment changes (as in every cycle) away from hyper-growth companies and into stable or safer businesses like those in the healthcare sector.

For an Exciting Ride: Choose Hims & Hers

Think of this as the “new kids on the block” company—one that's already made significant strides and achieved growth even before entering the weight loss market. However, most of the market has now associated Hims & Hers with weight loss only, which is the wrong way to look at this company.

The stock offers investors exposure to a company with a much broader base of products and services, and the best part is the business model itself. Unlike most other drug manufacturers, who eat what they kill in a sense through every bulk sale, Hims & Hers makes its living through subscriptions, which offer not only stable growth but also downside protection.

Speaking of benefits, investors can see through Hims & Hers’ financials that the company operates under a 76.2% gross profit margin, which is usually reserved for the economy's software companies. Some institutions consider this stock a Buy due to its subscription benefits, strong fundamentals, and position in the weight loss market, such as those from Nomura Holdings, which decided to build a stake worth $8 million as of mid-August 2025. 

This represents a vote of confidence in this company’s position in the industry and its future upside potential for quarters (or even years) to come.

Stability in Size, Where Eli Lilly Rules

Compared to Hims & Hers, a $10 billion company, Eli Lilly’s $663 billion market capitalization allows it to remain strong-footed in this current Ozempic race. It also has access to more capital and backing to scale faster and better, should it produce the leading product in this current competition.

That might be a reason why Wall Street analysts have decided to reward the company with a consensus view of a Moderate Buy alongside a $950.2 per share valuation target. Compared to where it trades today, a low 72% of its 52-week high, this call would imply a net rally of 35.8% for the company in the coming months.

All told, investors can choose Eli Lilly’s size and decades of experience, which provide the stock with an inherently lower beta (volatility measure) of only 0.44x. In comparison, Hims & Hers carries a much higher beta of 2.10x due to its smaller size and ramp-up phase, in exchange for potentially faster growth and more aggressive upside price action.

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The article "Ozempic Boom: Hims & Eli Lilly Lead Healthcare Bets" first appeared on MarketBeat.