Hims & Hers Stock Drops on Weak Q2 Revenue Forecast
Hims & Hers Health just surprised Wall Street. The company posted strong results for the last quarter. Revenue jumped 52% compared to last year. Profit also looked better, they made money instead of losing it.
But here’s the twist. After all the good news, the stock still dropped. Why?
It’s because the company gave a weak forecast for future revenue. Investors care about what’s next, not just what’s now. So even with big growth in sales and subscribers, that cautious outlook caused concern.
We’ve seen this before. A company shares strong numbers, but one small warning can shake investor trust. In this case, the issue is weight-loss drugs. The FDA’s new rules changed the game, and Hims & Hers had to adjust fast.
Let’s walk you through what happened. We’ll explore their financials, the stock’s reaction, and what this means for the future.
Q2 2024 Financial Highlights
In Q2 2024, Hims & Hers showed strong growth in key areas.
- Revenue: The company made $315.6 million. That’s 52% more than the same time last year.
- Net Income: Hims & Hers made a profit of $13.3 million. Last year, they had a loss of $7.2 million.
- Adjusted EBITDA: It rose to $39.3 million. Last year, it was only $10.6 million. This shows better control over spending.
- Subscriber Growth: The company had 1.9 million users. That’s 43% more than last year. More people are using their online health services.
- Gross Margin: Their gross margin was 81%. It dropped slightly from 82% last year. But it still shows healthy profits.
These numbers show that Hims & Hers is growing fast in digital health.
Market Reaction
Even though Hims & Hers shared strong results, the stock went down after the news. The main reason was the company’s careful forecast for the next quarter. Investors are worried about how long the company can keep growing.
A big part of its income came from weight-loss drugs. But new rules are changing that. Experts said the results were good. Still, people are thinking more about the future and outside problems. That’s why the stock dropped.
Challenges in the Weight-Loss Drug Segment
Hims & Hers ran into trouble with its weight-loss drug plans due to new rules.
The FDA said semaglutide was no longer in short supply. This drug is used in big-name products like Ozempic and Wegovy.
Because of that update, Hims & Hers had to stop selling its compounded versions of semaglutide. These were a big part of their weight-loss sales. Losing them could mean less money coming in.
Big drug companies like Eli Lilly and Novo Nordisk already sell FDA-approved versions. They are strong in the market and make it harder for Hims & Hers to compete.
Because of all this, the company now needs to change its strategy and follow the new rules.
Strategic Adjustments and Future Outlook
Hims & Hers made some smart moves to handle recent problems.
The company teamed up with Novo Nordisk. Now, it can offer Wegovy, an FDA-approved weight-loss drug, on its site. This helps fill the gap left by the banned compounded drugs.
Hims & Hers is not just about weight loss anymore. It now offers more care, like help with skin, mental health, and regular doctor visits. This way, the company isn’t relying on just one product.
For 2024, the company expects to make $1.37 to $1.40 billion. It also aims for $140 to $155 million in adjusted EBITDA.
Looking ahead to 2025, it hopes for $2.3 to $2.4 billion in revenue and $295 to $335 million in adjusted EBITDA. These numbers show they feel good about the future.
These steps show that Hims & Hers is working hard to grow and adjust in a changing market.
Final Thoughts
Hims & Hers Health Inc. stock showed strong growth in Q2 2024, even with some big challenges. The stock fell a bit after the earnings report, mainly because people were worried about what’s coming next. But the company isn’t standing still. They made smart choices like teaming up with Novo Nordisk and offering more types of care. This helps them grow beyond just weight-loss drugs.
As digital health keeps changing, Hims & Hers is staying flexible. Their focus on full, easy-to-access care could help them do well in the future.
Frequently Asked Questions (FAQs)
For 2025, Hims & Hers projects revenue between $2.3 billion and $2.4 billion, up from $1.5 billion in 2024. This reflects strong growth in digital health services.
The stock dropped after the FDA ended the shortage of weight-loss drugs. This hurt Hims & Hers’ compounded products, causing concerns about future revenue.
Analysts have an average 12-month price target of $38.67 for HIMS stock. It indicates modest upside. Ratings vary between buy, hold, and sell.
Yes, Hims & Hers is now growing into women’s health and personalized care. This helps reduce reliance on weight-loss drugs and supports long-term growth.
Disclaimer:
This content is for informational purposes only and not financial advice. Always conduct your research.