HIMS Earnings Preview: Strategic Plays for an Expected 18% Move
By Cash Flow University · · 3 min read
HIMS is set to release earnings with an 18% implied move. Here is how I am using a put credit spread to strategically position for potential outcomes while managing risk.
HIMS Earnings Preview: Strategic Plays for an Expected 18% Move
HIMS is set to release its earnings report tomorrow after the market closes, and discussions around the stock have reached a fervent pitch. Investors are anticipating a high volatility play, with an 18% implied move noted. Here is why this release is generating such buzz and how you can strategically position yourself for potential outcomes.
The Market Sentiment and Earnings Outlook
HIMS's performance is currently tied to the GLP-1 regulatory headline narrative. Recent acquisition chatter involving Eucalyptus adds another layer of unpredictability. Depending on these elements, market sentiment could push the stock significantly higher or lower post-earnings. For a healthy market response, investors are keen on not only a good earnings report but also positive future guidance.
We are in a market condition where companies with good earnings results must also reaffirm previous guidance. Mr. Derivatives has pointed out an expected swing of 18% up or down for HIMS. The stock has experienced significant downward pressure, declining in 17 of the last 18 weeks. This setup suggests the potential for a rebound, perhaps even a "dead cat bounce," leading to a rising trend.
Technical Analysis and Strategic Positioning
Technically, HIMS is poised in a supportive "low" area highlighted by key moving averages. With the stock trading below both the 20-day and 200-day moving averages, the stage is set for a potential upside if the 18% implied move materializes.
Key support levels around $15.50 to $15.75 mark areas where the stock has found a consistent floor. Good earnings or guidance could propel the stock higher, while even takeover talks might catalyze substantial appreciation.
💡 Pro Tip: With a $15.63 basis and an 18% implied move, the downside target comes to roughly $12.81, which rounds up to $13. This is the strike level where we anchor the put credit spread.
The Trade Setup: Put Credit Spread
For those looking to play this move, here is a trading strategy that balances risk and opportunity. Starting with the $15.63 basis, we calculate the 18% move in both directions to set price targets.
The recommended trade, which was issued on the CFU Discord, involves the following spread:
Valuing Risk for Potential Reward
This spread generates a $46 net credit while putting up $154 in risk capital. With a break-even at $12.54, even if shares get assigned, there are rolling and wheel strategy opportunities to stabilize income.
⚠️ Risk Warning: Trading around earnings carries significant risk. Unexpected results or guidance could lead to outsized moves. Always size positions according to your risk tolerance and never risk more than you can afford to lose.
HIMS represents a volatile opportunity during this earnings season. With a downside hedge in place, even neutral or upward moves will keep this strategy profitable.
🎯 Key Takeaways
- ✅ HIMS has an 18% implied move heading into earnings
- ✅ GLP-1 regulatory headlines and Eucalyptus acquisition talk add volatility
- ✅ Put credit spread ($13/$11) collects $46 credit with $154 max risk
- ✅ Break-even at $12.54 provides cushion below current support
- ✅ Even assignment offers wheel strategy income opportunities
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