Hims & Hers Health (NYSE: HIMS) saw its stock climb 10.2% on Friday to close at $28.27, as market participants positioned ahead of the telehealth company's first-quarter earnings report due Monday after the closing bell. Despite the recent uptick, shares remain in negative territory for the year, with investors keenly focused on the company's strategic shift into the weight-loss drug market.
Q1 Expectations and Wall Street Sentiment
Analysts surveyed by TipRanks project first-quarter revenue of approximately $616.88 million and earnings per share of $0.03. The stock carries a "Moderate Buy" consensus rating, supported by five buy recommendations and ten hold calls. Deutsche Bank analyst George Hill maintained a Hold rating while trimming his price target to $25 from $28, citing regulatory risks, a pending lawsuit from Novo Nordisk, and the conclusion of the semaglutide shortage as key headwinds.
Strategic Pivot to Branded GLP-1 Drugs
The company's evolution from lower-cost compounded weight-loss medications to FDA-approved GLP-1 treatments is a central theme. In March, Hims announced a deal with Novo Nordisk to offer Ozempic and Wegovy through its platform, prompting Novo to drop its lawsuit without prejudice. CEO Andrew Dudum characterized the partnership as an opportunity to build "a new model that works for everyday people." Hims has since clarified that it will only offer compounded GLP-1s to a limited group of patients who cannot be served by approved medications.
In April, the company expanded its offerings to include Eli Lilly's Zepbound and Foundayo, directing prescriptions through LillyDirect. Hims emphasized that providing access to these drugs does not constitute a formal partnership with Lilly. This positions the company strategically between two obesity-drug heavyweights—Novo Nordisk and Eli Lilly—as oral GLP-1 treatments begin to enter the market.
Regulatory Landscape and FDA Actions
On April 30, the FDA moved to remove semaglutide, tirzepatide, and liraglutide from the 503B bulks list, arguing that there is no clinical justification for outsourcing facilities to compound these drugs from bulk ingredients. The agency is accepting public comments through June 29 before making a final decision. FDA Commissioner Marty Makary emphasized that outsourcing facilities must demonstrate a "clear clinical need" when approved drugs are available.
Hims has downplayed the potential impact, with a spokesperson telling Reuters that "there are no GLP-1s compounded by 503B facilities accessible through our platform." However, Reuters noted that many telehealth firms source individualized compounded doses from 503A pharmacies, which could face indirect effects.
Financial Performance and Growth Initiatives
For the full year 2025, Hims reported revenue of approximately $2.35 billion, a 59% increase year-over-year, net income of $128 million, and adjusted EBITDA of $318 million. Subscriber count surpassed 2.5 million, representing 13% growth. The company is also investing in international expansion, having agreed in February to acquire Australian digital health firm Eucalyptus for up to $1.15 billion, which will extend its reach into Australia, Japan, the UK, Germany, and Canada.
Risks and Outlook
Hims disclosed in its annual filing that tighter regulations on compounding or marketing of compounded GLP-1s could adversely affect its finances, cash flow, margins, pricing, and demand, potentially leading to customer cancellations. The filing also revealed that the SEC opened an investigation in February focusing on company statements and disclosures related to compounded semaglutide and its business relationships.
Looking ahead, Monday's earnings report will serve as a critical test of Hims' ability to sustain growth through branded obesity medications, subscription sales, and new health lines, even as regulators, investors, and drugmakers continue to scrutinize its compounding strategy.
