Title: Hims & Hers: The Weight-Loss Hype Train May Be Running Out of Steam
Hims & Hers Health (NYSE: HIMS) has been a Wall Street darling, and its recent Q3 earnings report sent the stock popping. But beyond the initial euphoria, a closer look at the numbers suggests a potential slowdown in their core growth engine: weight loss. The market is forward-looking, and Hims & Hers needs to show it is too.
Digging into the Details: Revenue vs. Profit
The headline numbers were a mixed bag. Revenue beat expectations, coming in at $598.97 million against an estimated $580.24 million. That's a solid 3.2% beat. However, earnings per share (EPS) missed, with the company reporting six cents against an expected nine cents. This discrepancy is the first red flag. Revenue growth is great, but if it's not translating to the bottom line, it's a problem.
Subscriber growth is also slowing. While the company boasts almost 2.5 million subscribers, that represents a 21% year-over-year increase. Respectable, but consider this: Hims & Hers has been aggressively pushing its weight-loss programs, particularly GLP-1 medications. The article mentions a reaffirmed $725 million weight-loss revenue target for 2025. The question is, at what cost? Are they acquiring subscribers who are less profitable or who churn at a higher rate after their initial weight loss goals are met?
Hims is actively engaged in discussions to offer Novo Nordisk's oral Wegovy and Wegovy injections through its platform. That's good for hype, but does it make financial sense for Hims & Hers? The company is already "offboarding customers from commercial GLP-1 dosages," according to one source.
And this is the part of the report that I find genuinely puzzling: they're pulling back on GLP-1s (likely due to cost and supply constraints) while simultaneously talking about offering Wegovy. How does that math work? Are they betting on future price drops or supply increases? Or are they simply chasing headlines? Hims & Hers Stock Pops After Q3 Earnings: Here's Why - Hims & Hers Health (NYSE:HIMS)
Beyond Weight Loss: Diversification or Distraction?
Hims & Hers is clearly trying to diversify beyond weight loss. The upcoming launch in hormonal health, targeting menopause and testosterone deficiencies, is a significant move into a market the company estimates includes over 50 million U.S. adults. That's a large addressable market, but it's also a very different market than the younger, digitally native audience they've traditionally targeted. Can they successfully pivot their marketing and branding to appeal to this new demographic?
The acquisition of a blood-testing lab also points to a broader strategy of preventative care and "health membership" models. This makes sense in theory – recurring revenue is always attractive – but it also requires significant investment in infrastructure and technology.
Hims CTO Mo Elshenawy is talking up AI-driven personalization, including 24/7 care agents and automated fulfillment. Every company is touting AI these days, but the real question is whether Hims & Hers can actually deliver on the promise of truly personalized care at scale. AI is only as good as the data it's trained on, and if the data is biased or incomplete, the results will be too.
The ZAVA acquisition is interesting. It gives Hims & Hers a foothold in the UK, France, and Germany, with Canada on the horizon. But international expansion is fraught with challenges, from regulatory hurdles to cultural differences. Are they ready to navigate the complexities of different healthcare systems?
The Hype Doesn't Match the Fundamentals
The market is clearly excited about Hims & Hers' growth potential. But a closer look at the numbers reveals some potential cracks in the foundation. Revenue growth is slowing, EPS is missing expectations, and the company's diversification efforts are still in their early stages. Hims & Hers needs to prove that it can maintain its momentum in weight loss while successfully expanding into new markets and services. Otherwise, the stock's pop may be short-lived.
So Much Hype, So Few Profits
Hims & Hers is a story stock, no doubt. But stories don't pay the bills. Eventually, the company needs to translate its impressive subscriber growth and innovative initiatives into sustainable profitability. Until then, I'm remaining skeptical.
