Hims & Hers (HIMS 3.73%) is in the middle of a very public dispute with Novo Nordisk (NVO 1.75%). However, this fight isn't likely to derail Hims & Hers long term. Here's why this direct-to-consumer drug company could be a moonshot in the making.
What does Hims & Hers do?
Hims & Hers makes and sells drugs. That's not remotely unusual. The key difference is the way the company interacts with its customers, which is digitally driven. Essentially, Hims & Hers uses a lifestyle approach to acquire new customers via its online platform.
Image source: Getty Images.
It clearly works. At the end of 2020, the company had roughly 300,000 subscribers. By the end of 2025, the company had 2.5 million subscribers. Most of Hims & Hers' subscribers buy multiple products from the company.
In 2025, the company added over 280,000 new subscribers. Subscriptions are the key, because these are customers who have agreed to buy products on an ongoing basis. That creates an annuity-like income stream for Hims & Hers. This moves beyond the typical pharmaceutical model, and the growing customer base creates a foundation for expansion.
Expansion is Hims & Hers' game plan, as it looks to broaden its product offerings. As its brand gains traction in the consumer market, the company could see its revenues start to snowball as current subscribers order more and new subscribers are added.
There are headwinds to consider
A $5,000 investment in Hims & Hers would buy you around 333 shares of the stock at a recent price of $15. That said, the price-to-earnings ratio is roughly 29x, which is a bit high. Investors clearly recognize the growth opportunity, and value-oriented investors probably won't be interested in Hims & Hers. However, for growth investors, there are clearly things to like about this profitable business.
NYSE: HIMS
Key Data Points
However, you need to go in with your eyes open. Hims & Hers is attempting to disrupt the way drugs are sold. It will face copycat competition, and drugmakers are likely to push back as well.
The most notable pushback right now is coming from Novo Nordisk. Hims & Hers benefited from the supply shortage of Novo Nordisk's GLP-1 drugs, enabling it to make copycat versions. Novo Nordisk's supply constraints are in the past, and it is suing Hims & Hers to stop these sales.
Novo Nordisk's position on this matter is likely correct. However, that will probably be just a short-term issue. The big story here is the growth opportunity of the direct-sales approach Hims & Hers is taking, which appears to resonate strongly with its subscribers.
