Real-Time BNB Signal Analytics
Real-Time BNB Signal Analytics
Hims & Hers Health (HIMS) is riding a wave of investor optimism, fueled by talks with Novo Nordisk about offering Wegovy (both oral and injectable) on its platform. The stock jumped nearly 6% in pre-market trading on this news. But is this surge justified, or is the market getting ahead of itself? Let's dig into the numbers and see if the hype aligns with reality.
On the surface, the potential partnership looks promising. Wegovy is a blockbuster drug in the booming weight-loss market, and access to it could significantly expand Hims' reach and solidify its position in the telehealth space. As Ethan Feller from Zacks Investment Research noted, this could "clear months of uncertainty" around Hims' weight-loss strategy. However, investors should remember that no definitive agreement has been reached, and even if it is, the terms could differ significantly from current expectations. Hims & Hers Stock (HIMS) Pops on Talks to Offer Novo Nordisk’s Wegovy
Hims & Hers' Q3 2025 results paint a mixed picture. Revenue came in strong at nearly $600 million, a 49% year-over-year increase. Subscriber growth is also healthy, reaching almost 2.5 million, up 21% year-over-year. However, EPS missed estimates at $0.06 versus the expected $0.10. Gross margin also took a hit, dropping from 79% to 74%. Is HIMS sacrificing profitability for growth? The numbers suggest that might be the case.
Adjusted EBITDA (a non-GAAP measure that Hims uses to assess operating performance) was $78.4 million, a 53% increase year-over-year. That sounds great, but the devil is always in the details. Adjusted EBITDA excludes things like stock-based compensation, depreciation, and acquisition-related costs. While useful for internal comparisons, it doesn't give a complete picture of the company's financial health.
Here's where things get interesting. Net income actually decreased from $75.6 million in Q3 2024 to $15.8 million in Q3 2025. The prior year's figure included a $60.8 million tax benefit, which skews the comparison, but it's still a significant drop. This discrepancy between revenue growth and net income raises a red flag. Are costs rising faster than revenue? It appears so.
This brings me to a point that I find genuinely puzzling. Hims & Hers' management is touting "strong, profitable growth," but the numbers tell a different story. While revenue is growing, profitability is declining. The company is spending heavily on marketing ($232.15 million in Q3 2025, compared to $182.284 million in Q3 2024) and operations ($76.848 million vs $47.519 million). This aggressive spending is driving revenue growth, but it's also eating into profits.
The company is narrowing its full-year 2025 revenue guidance to $2.335 billion to $2.355 billion and Adjusted EBITDA guidance to $307 million to $317 million. It is positive, but how much of that growth is already baked into the stock price?
One analysis suggests that HIMS is undervalued, with a fair value of $86.09. This is based on assumptions of rapid subscriber growth, fresh product launches, and platform expansion. However, these assumptions are highly sensitive to regulatory risks and the success of key pharmaceutical partnerships. A sudden regulatory tightening or a breakdown in the Novo Nordisk deal could quickly deflate this bullish narrative.
Wall Street analysts have a "Hold" consensus rating on HIMS stock, with an average price target of $49.75, implying a modest 12% upside from current levels. This suggests that analysts are cautiously optimistic, but not overwhelmingly bullish.
I've looked at dozens of these direct-to-consumer healthcare companies, and the long-term success hinges on a few key factors: customer retention, brand loyalty, and the ability to navigate the complex regulatory landscape. Hims & Hers has made strides in all these areas, but it's still early days. The company is building the infrastructure for personalized healthcare, similar to what Amazon did for retail, but the healthcare industry is far more regulated and complex.
The market is treating Hims & Hers like a tech company with explosive growth potential, but it's important to remember that it's still a healthcare company, subject to the same regulatory hurdles and competitive pressures as its peers. The Wegovy partnership is a potential game-changer, but it's not a done deal. Investors should temper their expectations and focus on the underlying fundamentals.
The market is clearly excited about the potential Wegovy partnership, but the reality is that Hims & Hers still has a lot to prove. While revenue growth is impressive, declining profitability is a concern. Investors should be wary of getting caught up in the hype and focus on the underlying financials. The long-term success of HIMS depends on its ability to scale efficiently, manage costs, and navigate the complex regulatory landscape. The Wegovy deal could be a catalyst, but it's not a guaranteed path to riches.
