Andrew Dudum didn’t start Hims and Hers just to sell hair loss pills. He wanted to change how we get medicine. But honestly, if you look at Hims and Hers stock today, you aren’t looking at a simple telehealth company anymore. You are looking at a battleground. It’s a fight between those who see a trillion-dollar healthcare disruptor and those who think the company is a glorified middleman riding the coattails of the Ozempic craze.
Markets are weird.
One day, Hims & Hers Health, Inc. (HIMS) is the darling of the "convenience economy." The next day, a single FDA announcement about drug shortages sends the share price into a tailspin. If you've been watching the ticker lately, you know exactly what I mean. It's volatile. It's loud. And frankly, it's one of the most misunderstood plays in the mid-cap space right now.
The GLP-1 Elephant in the Room
Let’s talk about the compounded drugs. This is the big one.
Earlier in 2024, Hims and Hers made a massive pivot. They started offering compounded GLP-1 injections. We’re talking about the same active ingredients in drugs like Wegovy and Zepbound, but at a fraction of the cost—roughly $199 a month compared to over $1,000 for the brand-name stuff. Investors lost their minds. The stock soared because, well, everyone wants to be thin, and nobody wants to pay a mortgage payment for the privilege.
But here is where it gets sticky.
The only reason Hims and Hers can legally sell these compounded versions is due to a specific loophole in federal law. When a drug is on the FDA’s official shortage list, pharmacies can create "compounded" versions of it. It’s a temporary fix for a national supply problem. But what happens when Eli Lilly and Novo Nordisk finally catch up? What happens when the FDA says the shortage is over?
Short-sellers like Citron Research have been shouting from the rooftops that this revenue is "low quality" and "temporary." They argue that once the shortage ends, the compounded GLP-1 business model for Hims and Hers stock evaporates.
Is that true? Maybe.
Hims and Hers leadership argues they are building a "personalized" platform. They aren't just selling a generic version; they’re selling an experience, a subscription, and a medical consultation. They want you to stay for the hair growth serums and the mental health support long after you’ve reached your goal weight.
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Beyond the Weight Loss Hype
If you strip away the GLP-1 noise, you still have a company that is growing like crazy. Revenue has been jumping 40% or 50% year-over-year in recent quarters. That isn't just luck.
They have mastered the art of the "Instagrammable" medical brand. Most healthcare companies feel like a sterile waiting room from 1984. Hims and Hers feels like a boutique hotel. That matters to Millennials and Gen Z. They don't want to go to a primary care physician to talk about hair loss or erectile dysfunction. They want to do it on their phone, at 11:00 PM, while watching Netflix.
The numbers back this up.
By mid-2024, the company surpassed 1.5 million subscribers. These are people paying monthly fees. That’s recurring revenue—the holy grail for Wall Street. When you have a subscriber base that is sticky, you can cross-sell. You start them on Minoxidil and eventually move them into skincare or weight management.
However, the cost to acquire these customers is high.
Marketing spend is the giant weight around the neck of Hims and Hers stock. To keep that growth engine humming, they have to spend hundreds of millions on ads. You've seen them. They are everywhere—podcasts, subway stations, Instagram stories. The question for long-term investors is whether the Lifetime Value (LTV) of a customer actually exceeds the Customer Acquisition Cost (CAC) by a wide enough margin to make the company truly profitable in the long run.
The Margin Reality Check
People often compare Hims and Hers to a tech company. It’s not. Not really.
It’s a consumer health company.
While tech companies have gross margins in the 80% to 90% range, Hims and Hers sits around 70% to 80%. That’s still fantastic, don't get me wrong. But they have physical goods. They have shipping costs. They have to pay real doctors to review those intake forms.
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When you look at the volatility of the stock, you're seeing the market try to figure out if Hims is a high-growth tech platform or a retail pharmacy with better graphic designers.
Why the FDA Is the Stock's Biggest Risk
You cannot talk about this stock without talking about regulation.
Telehealth laws are a patchwork. What is legal in California might be frowned upon in Florida. During the pandemic, many of the rules around prescribing controlled substances online were relaxed. Now, the DEA and the FDA are looking closer.
If the government decides that the "asynchronous" model—where you fill out a form instead of talking to a doctor over video—isn't rigorous enough, the business model breaks.
And then there's the Eli Lilly factor.
In late 2024, Eli Lilly started selling "single-dose vials" of Zepbound directly to consumers for about $399. This was a direct shot at the compounders. It showed that the big pharma giants aren't going to let Hims and Hers eat their lunch without a fight. They are lowering prices to bridge the gap, which puts immense pressure on the margins of Hims and Hers stock.
The Bear Case vs. The Bull Case
It’s complicated.
The bulls will tell you that Hims and Hers is the "Amazon of Healthcare." They believe the company is building a brand so strong that people will choose it regardless of price. They see the expansion into personalized supplements and "Medicated" skincare as a way to diversify away from the GLP-1 risks. They look at the positive Adjusted EBITDA and see a company that has finally turned the corner toward real profitability.
The bears see a ticking time bomb.
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They see a company that grew too fast on the back of a drug shortage that is destined to end. They see a founder who is aggressive and perhaps a bit too optimistic about the regulatory landscape. They see a stock that is priced for perfection in a world that is messy and unpredictable.
Honestly, both sides have points.
If you're holding Hims and Hers stock, you have to be okay with 10% swings in a single day. You have to be okay with the fact that a single tweet from a regulator could wipe out months of gains.
What Actually Matters for the Future
Watch the "Subscriber Retention" numbers.
Growth is easy when you spend money on ads. Keeping people is hard. If Hims and Hers can prove that their customers stay for 3, 4, or 5 years, the valuation starts to make a lot more sense. If people sign up for one month of hair pills and then cancel, the company is just a treadmill that will eventually run out of power.
Also, keep an eye on their "Hims on Amazon" or retail partnerships. They are moving into physical stores like Target and Walgreens. This is a double-edged sword. It increases brand awareness, but it kills those juicy 80% margins they get from direct-to-consumer sales.
Actionable Insights for Watching Hims and Hers
If you are trying to navigate this particular corner of the market, stop looking at the daily price action and look at the underlying structural shifts.
- Monitor the FDA Shortage Database: This is the most important "alt-data" for this stock. If Tirzepatide or Semaglutide are removed from the shortage list, expect the stock to react violently.
- Track Marketing Efficiency: Look at the ratio of revenue growth to marketing spend in their quarterly earnings. If they are spending more to get less, that's a massive red flag.
- Watch the Product Mix: The more the company moves into "personalized" dosages—things you can't get at a standard pharmacy—the more "moat" they have against big pharma.
- Diversification is Key: Don't treat this as a "weight loss stock." If that's the only reason you're interested, you might be better off looking at the pharmaceutical companies actually making the molecules.
Hims and Hers is a bet on a cultural shift. It’s a bet that the future of medicine is digital, branded, and incredibly convenient. Whether that bet pays off depends entirely on whether they can outrun the regulators and the pharmaceutical giants currently chasing them down.
The next few quarters will likely be the most telling in the company's short history. We'll see if the "personalized" healthcare dream is a sustainable business or just a very well-marketed moment in time. Regardless of which side you're on, it's definitely not a boring ticker to watch.
Next Steps for Investors:
- Review the SEC Filings: Specifically, look at the Risk Factors section in the most recent 10-K regarding "compounded medications."
- Compare Unit Economics: Analyze how Hims and Hers' customer acquisition costs compare to competitors like Ro or even traditional players like CVS Health.
- Audit the Regulatory Environment: Follow updates from the Outsourcing Facility Association (OFA) to understand the legal battles surrounding compounded GLP-1s.
- Evaluate Portfolio Weighting: Given the high volatility (Beta) of HIMS, ensure it doesn't over-concentrate your healthcare sector exposure.