It's been a tough start to the year for Hims & Hers Health (HIMS 7.75%). The stock has been cut in half year to date and is down around 70% over the past year, as of this writing. That follows a strong run in 2024 when the stock skyrocketed more than 170%, while it tacked on a strong 34% gain last year.
Much of the company's woes this year revolve around GLP-1 weight loss drugs. The company launched a compounded version of the Wegovy pill, which it promptly stopped offering after FDA Commissioner Marty Makary said he would go after companies making copycat drugs and drugmaker Novo Nordisk filed a patent lawsuit against the telehealth company. Hims & Hers had been legally selling compounded versions of semaglutide, the active ingredient in the injectable version of Wegovy, when the drug was in shortage.
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Meanwhile, the stock was unable to rebound after the company recently reported its fourth-quarter results. For the quarter, its sales climbed 28% year over year to $617.8 million. That was toward the high end of its $605 million to $625 million guidance. U.S revenue rose 17% to $554.1 million, while international revenue skyrocketed from $6.9 million a year ago to $63.7 million.
Monthly revenue per subscriber increased by 11% year over year to $83 per month, while the number of subscribers grew 13% to more than 2.51 million. Customers using at least one personalized subscription rose by 31% to 1.6 million, representing about 65% of its subscriber base.
The company continued to see some gross margin pressure, with it falling 500 basis points year over year to 72%. It attributed this to great contributions from international markets and the launch of new offerings. The company was able to see some marketing leverage, with marketing expenses as a percentage of revenue falling from 46% a year ago to 39%.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 23% from $54.1 million to $66.3 million. Earnings per share (EPS) came in at $0.08, down from $0.11 last year, but that topped the $0.05 consensus.
Looking ahead, Hims & Hers forecasts 2026 revenue to be between $2.7 billion and $2.9 billion with adjusted EBITDA of between $300 million to $375 million. That shows some expected margin pressure as it expands internationally.
For Q1, it expects revenue of between $600 million and $625 million, and adjusted EBITDA of $35 million to $55 million. While the full-year outlook was within expectations, its Q1 guidance fell short of the $647.9 million consensus.
NYSE: HIMS
Key Data Points
Should investors buy the dip?
Despite the regulatory issues the company is dealing with regarding GLP-1 drugs, it still believes its overall weight loss business is durable, while noting that its higher-margin non-weight loss offerings make up the majority of its revenue and cash flow. Meanwhile, it expects international markets to be a big growth driver in 2026 and beyond, and it recently announced that it will acquire a company called Eucalyptus to further push into non-U.S. markets.
After its plunge, the stock trades at a forward price-to-earnings ratio of around 14 times based on the analyst consensus for 2026. There is a risk its weight loss business could take a hit, but the stock looks pretty washed out at this point. I'd consider taking a small speculative position at these levels, given the company's opportunity with future new offerings and international expansion.
