Shares of Hims & Hers Health experienced a notable upswing on Friday, climbing 9.3% to close at $28.03, as options market activity signaled expectations of a significant price movement following the company's first-quarter earnings report due next week. The pricing of an at-the-money straddle, which involves purchasing both a call and a put at the same strike price, suggested traders are bracing for an approximate 14.8% swing in the stock after the results are released.
Earnings Report and Market Context
The company is scheduled to report its first-quarter financial performance after the market closes on Monday, May 11, with a conference call set for 5 p.m. ET that evening. This earnings release comes at a pivotal juncture, as regulatory scrutiny intensifies around compounded weight-loss drugs, a key area of focus for Hims. The company has positioned itself as a bellwether for two major themes on Wall Street: the direct-to-consumer healthcare model and the surging GLP-1 drug wave, which includes hormone-based medications for diabetes and weight loss. According to its latest annual report, over 70% of Hims' U.S. revenue in 2025 originated from personalized products, many of which involve compounded formulations. However, the company clarified that the majority of its domestic revenue did not come from GLP-1 offerings.
Analyst Divergence and Technical Levels
Opinions among analysts remain sharply divided. TipRanks data indicates that analysts are forecasting first-quarter earnings per share of $0.03 on revenue of $616.88 million. Deutsche Bank's George Hill recently lowered his price target for Hims to $25 from $28, maintaining a Hold rating amid concerns over FDA compounding rule risks, ongoing litigation with Novo Nordisk, and the winding down of the semaglutide shortage. Conversely, BofA's Allen Lutz raised his target to $32 from $30, describing the company's expansion related to LillyDirect as neutral-to-positive. On the technical side, the stock's move above $27.22 on Friday pushed it past a key resistance level noted by Anton Kharitonov of Traders Union, who had previously flagged the stock as defensive below that point.
New Product Launches and Strategic Moves
To diversify its revenue stream beyond a single product, Hims introduced Testosterone Rx+ on April 30, a daily pill containing enclomiphene and additional nutrients. The company's internal data indicates that 95% of users experienced increased testosterone levels, with 80% reaching optimal levels within 60 days. However, Hims noted that the product has not been reviewed or approved by the FDA for safety, effectiveness, or quality. Additionally, the company rolled out Labs AI, an AI-powered care agent designed to help customers interpret their lab results, though it stops short of providing diagnoses. Hims stated that Labs AI is already reaching a significant portion of its Labs customers, with plans for broader access in the future.
Regulatory Pressures and Industry Dynamics
The regulatory environment poses a significant challenge to Hims' business model. On April 30, the FDA proposed removing semaglutide, tirzepatide, and liraglutide from the 503B bulks list, a move that would restrict the compounding of these drugs from bulk substances. FDA Commissioner Marty Makary emphasized the need for a clear clinical need for compounding when FDA-approved alternatives are available. If enacted, this proposal could limit mass production at outsourcing facilities and impact telehealth companies that rely on these suppliers, according to Reuters. Novo Nordisk and Eli Lilly, the manufacturers of obesity drugs that compete with compounded alternatives, have supported the FDA's position.
Options Market and Earnings Expectations
The options market is not pricing in a quiet move following the earnings report. If the results come in strong, it could bolster the narrative of Hims as a broader platform play. Conversely, a disappointing number would amplify concerns related to the FDA, Novo Nordisk, and Eli Lilly—pressures that have already made Hims one of the most volatile healthcare stocks this year. Hims has guided first-quarter revenue between $600 million and $625 million, with adjusted EBITDA in the range of $35 million to $55 million, contingent on uninterrupted access to compounded semaglutide and stable business relationships.
