Hims & Hers: Is The Rollercoaster Stock Attractive?
Things are never clear until it's too late...
Hi Multis
I’ll start with a Peter Lynch quote. I’ll come back to it later in the article, but it’s important to keep in mind when you look at Hims & Hers.
Never a dull moment with Hims & Hers (HIMS). That’s a prime example of an understatement.
First, a partnership with Novo Nordisk, then a legal battle, and now a partnership with Novo Nordisk again. And that is just one of the multiple developments at Hims & Hers.
If you want to hold this stock, you need an iron-clad stomach. Many Potential Multibaggers have that, but this is by far the most volatile stock I’ve ever covered.
Depending on how you count, this is the fourth or even fifth 30%+ drop in the last year.
Let’s first look at the earnings results that were published at the end of February but we hadn’t had time to cover yet.
The Numbers
Revenue for Q4 2025 came in at $618M, up 28% YoY, in line with consensus. EPS came in at $0.08, a beat by $0.03.
For the full year, revenue was $2.35B, up 59% YoY.
Adjusted EBITDA for 2025 was $318M, up almost 80% YoY, at a 14% full-year margin. Net income was $128M. Operating cash flow hit $300M.
Subscribers grew to over 2.5 million. Monthly revenue per average subscriber hit $83 in Q4, up 11% YoY. Annualize that and you’re approaching $1,000 per customer per year. When it comes to health spending, people simply don’t hesitate the way they do in most consumer categories.
The number of personalized solutions tells an even more important story. At the end of 2025, approximately 65% of subscribers, about 1.6 million people, were on personalized treatments. At the end of 2023, that number was only 600,000. Nearly a million net new personalized subscribers in two years. That number shows what Hims & Hers wants to focus on.
The Stock Crash
On February 5, 2026, Hims & Hers announced it would begin offering a compounded semaglutide pill starting at $49 per month, with subsequent months at $99 per month. Novo Nordisk’s FDA-approved Wegovy pill had launched barely a month earlier, on January 5, with a starting cash price of $149 per month.
On February 7, 2026, Hims & Hers then announced it would no longer offer the compounded semaglutide pill. Only 48 hours, but what chaos.
The problem was that Hims & Hers was caught between a rock and a hard place. Because of strong patents, they couldn’t use Novo Nordisk’s SNAC delivery system for the pill to work in the gut. But if they used another mechanism, which they did, they actually needed FDA approval. And the FDA was swift to react to that aspect. With good reasons this time, if you ask me.
FDA Commissioner Marty Makary said the agency will “take swift action against companies mass-marketing illegal copycat drugs,” and general counsel Mike Stuart of the Department for Health and Human Services said he referred the matter to the Department of Justice for investigation.
Novo Nordisk filed a patent lawsuit and the 10-K filing disclosed that the SEC has opened an inquiry into Hims’ marketing, disclosures, and regulatory compliance around compounded GLP-1 products. But of course, with the new partnership, Novo Nordisk dropped the lawsuit.
Still, the FDA, DOJ, and SEC are simultaneously investigating Hims & Hers. Andrew Dudum’s response on the call was short:
I don’t think we can share too much on anything ongoing, but continue to welcome their conversations.
The existential risk posed by this compounding battle has largely been mitigated by the new partnership, but the regulatory overhang hasn’t fully disappeared. But I don’t think the outcome will be much worse than a fine, if anything.
The Q1 Guidance”Miss”
Q1 2026 guidance is $600M to $625M in revenue, which is just 2% to 7% YoY growth, and quite a big miss versus the consensus of $652M. But the details are important and the numbers have to be adjusted.
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