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Hims & Hers Stock Declines 3.1% in 3 Months: Is it a Buy Now?

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Hims & Hers Health, Inc.’s (HIMS - Free Report) investors have been experiencing some short-term losses from the stock of late, since mid-February, as the San Francisco, CA-based health and wellness platform’s stock has faced certain challenges. Although HIMS has lost 3.1% in the last three months, the stock has outperformed the industry’s 12.2% decline. It has also outperformed the broader Medical sector and S&P 500’s 10.9% and 3.8% declines, respectively.

A major development of HIMS in recent months has included the long-term collaboration with Novo Nordisk, announced in April. Two other notable developments this month are the announcement of the pricing of its offering of $870 million convertible senior notes and the appointment of Mo Elshenawy as the company’s new Chief Technology Officer. The company had also announced its first-quarter 2025 results, wherein it recorded a robust improvement in both the top and bottom lines and strength in its Online revenue channel. The increase in subscribers and monthly online revenue per average subscriber during the quarter was also seen.

However, HIMS’ lower Wholesale revenues during the quarter were disappointing. The gross margin contracted due to rising product costs, which do not bode well for the stock.

HIMS Three Months Price Comparison

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Image Source: Zacks Investment Research

Over the past three months, the stock’s performance has remained strong, outperforming its peers like Teladoc Health, Inc. (TDOC - Free Report) . However, HIMS slightly lagged behind its other peer, Abbott Laboratories (ABT - Free Report) . Teladoc’s shares have plunged 49.4%, while Abbott’s shares have gained 2.1% in the same time frame.

Despite several challenges within the health and wellness market, including workforce-related complications and health epidemics or pandemics, the estimates indicate that the company might be able to maintain the positive market momentum at present.

HIMS expects revenues for the second quarter of 2025 and the full year in the bands of $530 million to $550 million (reflecting an uptick of 68-74% year over year) and $2.3 billion to $2.4 billion (representing growth of 56-63% from 2024 levels), respectively. The Zacks Consensus Estimate for revenues for the second quarter and the full year is currently pegged at $550 million and $2.34 billion, respectively, while the same for earnings per share is currently pegged at 17 cents and 72 cents.

Hims & Hers has a unique mix of a clinically-focused electronic medical record system, digital prescriptions and cloud pharmacy fulfillment, each with multiple growth drivers promising robust growth potential.

HIMS’ Strong Fundamentals Aid It

HIMS aims to provide a bundled offering of Novo Nordisk’s FDA-approved Wegovy on the Hims & Hers platform as the first step in the collaboration roadmap, pairing innovative treatments with a leading care platform to elevate the impact of obesity care for consumers.

Hims & Hers’ continued focus on strengthening its comprehensive weight loss offerings, such as announcing the doorstep delivery of daily meal replacement bars and shakes in November 2024, looks promising. The company aims to help its customers achieve and maintain their health and wellness goals.

Hims & Hers is consistently witnessing strong market acceptance of its range of curated prescription and non-prescription health and wellness products and services. The company has been focusing on providing access to high-quality, personalized solutions at an affordable price, which is significantly driving the number of net subscribers.

Hims & Hers believes that the growing emphasis on personalized solutions, along with the maturing of newer customer groups introduced to favorable pricing models, is enhancing its retention rates. Additionally, the company is witnessing continued success in acquiring customers through more cost-effective channels as awareness of the Hims & Hers brands grows.

Hims & Hers’ Focus on AI

HIMS intends to use the proceeds from the convertible senior notes offering to support its global expansion through organic growth and strategic acquisitions, while also fueling deeper investment in artificial intelligence (AI), diagnostics and personalized treatments to scale access and meet rising demand for high-quality, personalized care.

The appointment of the new chief technology officer is expected to aid Hims & Hers in accelerating its vision to build the next-generation healthcare platform, powered by AI and designed to deliver deeply personalized, accessible care at scale.

Challenges Ahead for HIMS

While Hims & Hers aggressively expands its product portfolio, new launches come with upfront costs and operational pressures. Initiatives like the rollout of GLP-1 treatments and advancements in mental health solutions require substantial investment in research and development, marketing and infrastructure. Such expansions often lead to temporary margin compression as the company builds capacity to meet anticipated demand. For example, the introduction of compounded medications necessitates stringent compliance measures, adding to operating costs.

In the first quarter of 2025, Hims & Hers’ gross margin contracted 886 basis points due to a surge in the cost of revenues. This poses another challenge for the company if it is unable to control its costs in the future.

Hims & Hers’ Stock Valuation

HIMS’ forward 12-month P/S of 5.2X is lower than the industry’s average of 5.8X but is higher than its five-year median of 2.6X.

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Image Source: Zacks Investment Research

Teladoc and Abbott’s forward 12-month P/S currently stand at 0.5X and 5.1X, respectively, in the same time frame.

HIMS’ Estimate Movement

Estimates for Hims & Hers’ 2025 earnings have moved 14.3% north to 72 cents in the past 60 days.

Zacks Investment Research
Image Source: Zacks Investment Research

Our Final Take on Hims & Hers

There is no denying that Hims & Hers is poised favorably in terms of core business strength, earnings prowess, robust financial footing and global opportunities. The Zacks Rank #2 (Buy) company’s strong growth prospects make it a strong investment pick at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For those exploring to make new additions to their portfolios, the valuation indicates superior performance expectations compared with its industry peers. It is still valued lower than the industry, which suggests potential room for growth if it can align more closely with overall market performance. The favorable Zacks Style Score with a Growth Score of A suggests continued uptrend potential for HIMS.


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