It is bad news for telehealth company Hims & Hers Health (HIMS) today as shares plummeted after its earnings report from yesterday and some serious potential issues for the future as well. With one of its tentpole product offerings potentially lost, weight loss drugs, the news was a catastrophe to shareholders. Shares plummeted over 27% in Tuesday afternoon’s trading.
The earnings report was bad enough, the reports noted. Though its revenue nearly doubled against this time last year—up from $246.6 million in 2023’s fourth quarter to $481 million in 2024’s fourth—the gross margins reporting left investors concerned.
Then there was the matter of the biggest bombshell of all: GLP-1 agonizers, or “weight loss drugs.” For some time now, Hims and Hers Health had been able to produce a kind of generic weight loss drug thanks to a shortage of drugs from larger providers. This allowed for “compounding,” or a principle in healthcare law that allows the drug to be produced elsewhere when a shortage is in play. But now, the shortage is apparently over, and that brings an end to compounding.
Hope They Kept the Receipt
And that makes another problem in the making for Hims & Hers Health: it just bought a “peptide factory” in the United States. The move was intended to help strengthen Hims & Hers Health’s domestic supply chain, which is a noble goal by any standard. The only downside is that the move comes at a time when Hims & Hers Health is likely to need fewer peptides.
Though, thankfully, it will still have a use for them—reports note the peptides will be usable for everything from “cognitive performance” and “recovery sciences” to “biological resistances” along with “metabolic optimization”a—in several other fields. So though it is likely to lose one critical market, it should have other markets to help take up the slack.
Is Hims and Hers a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on HIMS stock based on three Buys, five Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 265.07% rally in its share price over the past year, the average HIMS price target of $46.44 per share implies 25.28% upside potential.
