Hims & Hers Health (HIMS -12.47%), the telehealth company famous for selling Ozempic lookalikes over the internet, is tumbling today, down 6.7% through 10:55 a.m. ET after missing in its second-quarter earnings report last night, on both the top and bottom lines.
Heading into the report, analysts forecast Hims & Hers would earn $0.23 per share on $552 million in sales -- but Hims & Hers earned only $0.17 per share, and sales were less than $545 million.
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Hims & Hers' Q2 earnings
But was the news really as bad as it seems? After all, while Hims & Hers "missed" on sales, it did still grow sales 73% year over year. That was twice as fast as it grew subscribers, too (31%), indicating that not only are more customers signing up for the company's services, but they're buying more, too. And while Hims & Hers missed on earnings, too, those earnings per share nearly tripled year over year.
Really, the only "bad" number I see in the report concerns free cash flow (FCF). Through the first half of this year, Hims & Hers grew its operating cash flow only 13%, to $90 million (within a couple of percentage points of reported net income). However, the company spent massively on capital expenditures -- more than $100 million -- resulting in negative FCF for the first half of 2025.
Investors seem unsure what to make of the news. At one point this morning, the stock had recovered all its losses, and even turned green, before falling back into the red.
Is Hims & Hers stock a sell?
So how should investors react to this conflicting news?
At $13.6 billion in market capitalization, Hims & Hers stock costs a pricey 70 times trailing earnings. It's even more expensive when valued on FCF -- about 103 times. These might be acceptable valuations if earnings were to continue tripling year after year. In fact, though, analysts see profits growing only 13% this year, and perhaps 57% next.
For the time being, Hims & Hers stock remains too expensive to buy.
