Hims & Hers Stock Plunges as Profit Vanishes and Growth Engine Sputters

What happened

Hims & Hers Health reported a third-quarter net loss of $33 million, or 14 cents a share, despite revenue rising 49% to $890.4 million. Subscribers grew more slowly than analysts expected, gross margin narrowed to 57%, and the company lowered its full-year adjusted EBITDA forecast and gave fourth-quarter revenue guidance below analysts’ expectations.

Confirmed

Global impact / market context

The results point to a cost and growth trade-off: spending tied to branded weight-loss drugs coincided with a net loss and lower gross margin, while subscriber growth missed expectations. Lower profit guidance and revenue expectations could weaken investors’ confidence in the company’s ability to turn sales growth into earnings.

Analyst inference

The article reports that shares fell nearly 12% Monday, erasing Friday’s 8% rise linked to the Eli Lilly drug-selling deal, and slipped about 2% in premarket trading Tuesday. This suggests investors weighed near-term profit and subscriber concerns against the deal’s potential contribution to sales.

Analyst inference

What to watch

1. Track whether subscriber growth improves from 2.79 million; continued shortfalls could limit the customer base available to support revenue growth and spread costs across more sales. Analyst inference
2. Compare fourth-quarter revenue with the company’s $875 million to $895 million guidance and analysts’ $953.8 million expectation to assess whether sales are falling short. Analyst inference
3. Watch whether branded weight-loss drug costs continue to pressure gross margin and adjusted EBITDA, the company’s stated profit measure, against its reduced full-year forecast. Analyst inference

Evidence

• gurufocus.com