Hims & Hers Gains 3.8% in 3 Months: Time to Hold the Stock or Sell?

Hims & Hers Health, Inc.’s HIMS investors have been experiencing some short-term gains from the stock lately, despite its bumpy ride over recent months. The San Francisco, CA-based health and wellness platform’s stock gained 3.8% compared with the industry’s 7.4% rise in the past three months. It has also outperformed the sector and the S&P 500’s gain of 6% and 8%, respectively, in the same time frame.

A major recent development of HIMS includes the launch of its new category in men’s health in September.

Hims & Hers had recorded a robust improvement in the top and bottom lines and strength in its Online revenue channel in second-quarter 2025. The increase in subscribers and monthly online revenue per average subscriber during the quarter was encouraging. The expansion of the operating margin during the quarter was also seen. However, HIMS’ lower Wholesale revenues in the quarter were disappointing. The gross margin contracted due to rising product costs, which do not bode well for the stock.

Hims & Hers is scheduled to release third-quarter 2025 results on Nov. 3, 2025, after the closing bell.

HIMS Three Months Price Comparison

Over the past three months, the stock’s performance has remained strong, outperforming its peers like Teladoc Health, Inc. TDOC and American Well Corporation AMWL, popularly known as Amwell. Teladoc Health’s and Amwell’s shares have gained 2% and lost 28.6%, respectively, in the same time frame.

HIMS expects revenues for the third quarter of 2025 and the full year in the bands of $570 million to $590 million (reflecting an uptick of 42-47% year over year) and $2.3 billion to $2.4 billion (representing growth of 56-63% from 2024 levels), respectively. The Zacks Consensus Estimate for revenues for the third quarter and the full year is currently pegged at $581.6 million and $2.35 billion, respectively, while the same for earnings per share is currently pegged at 9 cents and 60 cents, respectively.

HIMS’ Expanding Risks Overshadow Growth

Hims & Hers’ aggressive expansion strategy is amplifying operational complexities and regulatory exposure. The company’s recent ZAVA acquisition introduces multiple layers of compliance across the U.K., Germany, France, and Ireland — regions with varying healthcare and data privacy regulations. Integration challenges and localization demands could weigh heavily on margins before any material contribution appears, with management expecting the deal to turn accretive only by 2026. Compounding this risk, the company’s planned 2026 Canadian launch, tied to generic semaglutide availability, hinges on uncertain regulatory timelines and pricing dynamics, making its international roadmap more fragile than forecasted.

Further, Hims & Hers’ heavy reliance on convertible debt financing — an $870 million 0% senior note issue — may create future dilution risk if stock underperforms against its lofty $70.67 conversion price. The funds are earmarked for acquisitions and AI investments, yet management admits there are no definitive acquisition agreements in place, signaling potential inefficiency in capital deployment.

Adding to these pressures, mounting cost intensity and execution risks are eroding the scalability narrative. Hims & Hers’ rapid workforce growth — over 1,600 employees and 1,300 affiliated medical providers — demands significant operational spending to sustain provider networks, customer acquisition and compliance monitoring. With new verticals such as hormonal and longevity care in early-stage buildout, fixed costs are expected to outpace near-term revenue growth, limiting profitability momentum.

Hims & Hers’ Regulatory and Structural Vulnerabilities

Despite rapid subscriber growth, Hims & Hers’ model faces mounting regulatory pressure tied to compounded drugs and telehealth oversight. The FDA’s February 2025 resolution of the semaglutide shortage restricts the company’s ability to sell compounded GLP-1 products — a key contributor to recent growth — exposing it to sharp revenue deceleration. Additionally, its entry into peptide manufacturing and lab testing introduces new compliance obligations under the FDA, Centers for Medicare & Medicaid Services and CLIA frameworks, marking uncharted operational territory where lapses could trigger fines or shutdowns.

Hims & Hers’ escalating compliance load, fragmented medical partnerships and reliance on third-party pharmacies further magnify risks around execution and oversight. Management’s optimism in achieving $6.5 billion in 2030 revenue targets thus appears detached from the current risk landscape — one shaped more by regulatory tightening and operational overreach than by sustainable growth momentum.

Fundamentals to Drive HIMS

Hims & Hers continues to demonstrate strong execution supported by a rapidly scaling subscription model and growing consumer loyalty. With over 2.4 million subscribers —1.5 million of whom receive personalized treatment plans — the company benefits from exceptional engagement and retention, particularly within its weight-loss vertical, where discontinuation rates are just 25% after six months. This high stickiness underscores the strength of HIMS’ digital platform, where data-driven care and app-based tools foster consistent interaction and recurring revenue visibility.

Hims & Hers is broadening its portfolio with the launch of a new hormonal health vertical, targeting both men’s and women’s wellness. For men, the introduction of personalized testosterone therapies, including oral options, modernizes treatment for energy and libido issues while eliminating the need for injections. For women, upcoming menopause-related solutions address symptoms like hot flashes and sleep disturbances, creating a holistic offering in an area long underserved by traditional healthcare. These additions expand HIMS’ total addressable market while enhancing brand credibility in precision medicine.

Hims & Hers’ Stock Valuation

HIMS’ forward 12-month P/S of 4.6X is lower than the industry’s average of 5.9X but is higher than its three-year median of 2.5X.

Teladoc Health and Amwell’s forward 12-month P/S currently stand at 0.6X and 0.4X, respectively, in the same time frame.

HIMS’ Estimate Movement

Estimates for Hims & Hers’ 2025 earnings have moved 6.3% south to 60 cents in the past 60 days.

Estimates for Teladoc Health and Amwell’s 2025 loss per share have remained flat at $1.17 and $6.13, respectively, in the past 60 days.

Our Final Take on Hims & Hers

There is no denying that Hims & Hers is poised favorably in terms of core business strength, earnings prowess, robust financial footing and global opportunities. However, holding on to this Zacks Rank #4 (Sell) company at present does not seem to be prudent, despite the company’s strong growth prospects present a good reason for existing investors to retain shares for potential future gains.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the valuation indicates superior performance expectations compared with its industry peers. It is still valued lower than the industry, which suggests potential room for growth if it can align more closely with overall market performance. The favorable Zacks Style Score with a Growth Score of A suggests continued uptrend potential for HIMS.

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This article originally published on Zacks Investment Research (zacks.com).

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