Hims & Hers Health (NYSE: HIMS) shares closed Monday at $30.82, up 10.98%, and added another 0.3% in after-hours trading. The rally outpaced both the Nasdaq Composite’s 2.13% gain and the S&P 500’s 1.48% rise, signaling renewed investor optimism ahead of the company’s second-quarter earnings report.
The rebound effectively repaired the damage from last week’s regulatory selloff. Monday’s close stood 5.1% above the July 28 pre-FTC level, when shares traded at $29.32 before the Federal Trade Commission lawsuit was announced. The stock had plunged 14.73% on July 29 following the FTC’s allegations of privacy, billing, and cancellation violations, but has since recovered 23.3% from that lawsuit-day close.
Despite the weekly loss of 1.1% for the July 27–31 period, the market has now erased the price damage. The daily gain on Monday equaled 78.4% of the options-implied move for the upcoming earnings report, suggesting traders are positioning for a significant catalyst.
Hims & Hers is scheduled to report second-quarter results after the market close on August 10, with a conference call at 5 p.m. ET. Options currently imply a 14% move around the report, slightly below the 15.2% average implied move for the prior eight earnings releases. Notably, actual moves exceeded implied expectations in three of the last eight reports, including a +76.1% positive swing and a -34.1% negative swing.
The more challenging number lies within management’s May guidance. At the midpoint, second-quarter revenue is projected to rise 13.5% sequentially to $690 million, while adjusted EBITDA is expected to increase just 1.6% to $45 million, implying a margin of 6.5%. For the full year, the midpoint targets revenue of $2.9 billion and adjusted EBITDA of $312.5 million, translating to a 10.8% margin. However, achieving that would require a steep second-half acceleration: adjusted EBITDA would need to climb 150% from first-half levels, and revenue would need to grow 23.4%, with the margin more than doubling.
This comparison is not a forecast, as the May guidance excluded any potential contribution from Eucalyptus, which Hims acquired on June 2. Eucalyptus, a telehealth provider serving over 850,000 customers across Australia, Canada, Germany, Japan, and Britain, will alter the reported revenue and cost base. Still, the bridge highlights the stand-alone margin burden embedded in the old outlook.
First-quarter results illustrate that burden. Revenue grew 4% year-over-year, but gross margin dropped eight percentage points to 65%. U.S. revenue fell 8% to $529.9 million, while international revenue surged 969% from a tiny base. Adjusted EBITDA plunged 51% to $44.3 million, reflecting higher product costs associated with the shift toward branded weight-loss drugs, including Novo Nordisk’s Wegovy and Ozempic.
Chief Financial Officer Yemi Okupe said in May, “We expect growth to accelerate from here.” The upcoming report will test that assertion. Jefferies analyst Brian Tanquilut noted that investors are seeking proof that “the company’s earnings power has bottomed.” Monday’s rally raises the bar for such evidence.
Risks remain, including the FTC lawsuit, which the company has called baseless and vowed to “vigorously defend.” Lower margins on branded drugs and Eucalyptus integration add further execution risk. The price damage is gone, but the earnings hurdle is not.
