Hims & Hers: Why a 14% Stock Drop Might Be a Buy Signal

Summary

Despite a 14% stock drop following their latest earnings report, Hims and Hers appears to be on a strong growth trajectory, with analysts raising price targets. The company has increased its 2026 guidance and is experiencing significant momentum, particularly in its weight loss offerings. Hims and Hers is seeing approximately 100,000 new subscribers per month for weight loss treatments, driven by new offerings like Novo Nordisk's WGOI and Ozempic. This is a substantial increase, building on the 70,000 subscriber growth in the first quarter. A strategic shift from compounded products to branded ones has led to $33 million in restructuring costs, impacting gross margins. However, the company is focusing on a long-term vision of proactive, continuous health care, integrating lab services and smart device monitoring. Future growth is expected from entering markets like peptides, with potential launches around 2027. While first-quarter revenue growth was only 4%, management anticipates 30% average growth for the remainder of 2026, boosted by the upcoming acquisition of Eucalyptus. This strategic pivot, though creating short-term noise, positions Hims and Hers for significant long-term value and growth.