If you only glance at the share price, you might think the Hims & Hers Health (HIMS) story has lost its spark. The stock has declined by more than 15% since last week. In fact, post its Q3 update, the stock has recorded heavy declines, with bears highlighting GLP-1 dependence, margin pressure, and a fresh wave of spending as being insufficient to sustain the telehealth story moving forward.
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However, despite the naysayers, I see a business that continues to compound as speculators create all the noise. Over the course of Q3, revenues rose again, this time by 49% year-over-year to almost $600 million, with nearly 2.5 million subscribers and continued profitability.
In the meantime, the product menu is evolving into a broad consumer health platform, not just a weight-loss kiosk. That mix of ecosystem expansion and recent multiple compression is precisely why I prefer to buy into the ongoing HIMS pullback.
Why the Bears Only See GLP-1
Before I present my bullish case for HIMS, I need to address the concerns of the bears, as their arguments have been weighing on the stock lately. Essentially, Hims & Hers has capitalized on a massive wave of demand for compounded semaglutide, a GLP-1 mimetic similar to Novo Nordisk’s (NVO) Wegovy.
When the FDA declared the semaglutide shortage over and tightened the rules on compounded versions, the sentiment on HIMS stock plummeted as the company announced it would cease selling specific copycat formulations. These headlines, at around the start of the year, along with regulatory scrutiny, reinforced the idea that HIMS is basically a GLP-1 trade with a regulatory bullseye on its back.
Those worries bled straight into the Q3 reaction. On paper, the quarter looked fantastic, with revenue up 49%, subscribers up 21%, and adjusted EBITDA reaching $78.4 million, representing a 13% margin. However, the gross margin slipped from 79% a year ago to 74%, mainly due to specific weight-loss plans now shipping more frequently, which spreads revenue over more shipments and increases fulfillment costs. EPS missed consensus, and management trimmed the midpoint of 2025 revenue guidance by a few million dollars while maintaining growth of nearly 60%.
Then came the part that really prompted the short-term traders to sell off the stock and call it a day: On the earnings call, CFO Yemi Okupe was explicit that the company would now “elevate investment” in facilities, technology, diagnostics, and international expansion. Capex is rising as Hims & Hers expands its fulfillment footprint from under 400,000 square feet at the start of the year to more than 1 million square feet by year-end, adding sterile-compounding and gummy capabilities.
Operating cash flow in Q3 was $149 million, up 74% year-over-year, but free cash flow was roughly flat at $79 million, as a significant portion of the cash is being reinvested in automation and infrastructure. To bears, that looks like management doubling down on an already volatile GLP-1 model right as regulators and big pharma get tougher.
A Bigger, Stickier Health Platform
However, I see a different movie playing out. On the Hims side, Q3 saw the launch of a low-testosterone program that pairs at-home lab testing with provider-guided treatment plans. Management noted on the call that a majority of new testosterone customers were already using another Hims service, which is the sort of cross-sell behavior investors want to see in a subscription platform. On the Hers side, the company has rolled out solutions for perimenopause and menopause, and it expects the Hers portfolio alone to generate more than $1 billion in revenue by 2026.
Diagnostics is the next big building block. HIMS is launching comprehensive lab testing, featuring panels that can cover 50 to 120 biomarkers, thanks to a partnership with Quest Diagnostics (DGS) that provides access to more than 1,000 lab sites in the U.S. These results inform personalized treatment plans managed by the company’s provider network. Additionally, management is preparing a comprehensive “longevity” specialty for 2026, centered on peptides, coenzymes, and GLP-1/GIP therapies, supported by its own California-based peptide manufacturing facility.
Meanwhile, its platform is expanding globally. The acquisition of Zava Global brought infrastructure across the U.K., Germany, France, and Ireland. In Q3, Hims & Hers expanded into Spain and is preparing to launch in Canada. Management now views international markets as a long-term opportunity with annual revenue potential exceeding $1 billion, reaching over 200 million adults. I am looking at all of this progress, and I can’t help but envision HIMS building a global ecosystem around personalized healthcare that nobody has attempted before.
Fast Growth, Cheaper Stock
Now for the part that matters to anyone thinking about buying the dip. Today, after the Q3 wobble and a broader tech pullback, the stock is trading at about $35, or an $8 billion market cap, despite Wall Street still expecting approximately $2.35 billion in revenue for 2025 and high-50s percent growth. That re-rating shows up in the multiples. HIMS is now trading at roughly 3.7x trailing sales and about 3.1x forward sales. I find these multiples absurd for a company that is quite profitable, both on a net income and free cash flow basis. The forward P/E of 74x, compared to the sector median of 25x indicates just how much expectation is still loaded into the stock.
In the meantime, note that short interest remains enormous, at around 38% of the float, which, as we know, reflects a significant camp (the bears) betting HIMS has more downside from here. However, I actually believe this can turn into a positive development, as the more HIMS executes and grows, the more likely it is that the market will eventually digest the investment case, re-rate the stock higher, and potentially cause a squeeze for the shorts as they rush for the exit.
Note that HIMS recently announced a $250 million buyback program, indicating that management sees the current share price as undervalued, in real terms, and has enough confidence in the company’s long-term trajectory to reinvest directly in its own stock.
Is HIMS a Buy, Hold, or Sell?
On Wall Street, HIMS stock carries a Hold consensus rating based on two Buy, six Hold, and two Sell ratings over the past three months. HIMS’s average stock price target of $48.57 implies approximately 36% upside potential over the next twelve months.
Final Thoughts
Stepping back, the post-Q3 pullback doesn’t undermine the broader bullish thesis for HIMS. Bears may still be fixated on yesterday’s GLP-1 narrative, but Hims & Hers is steadily building a global, multi-specialty health platform—one positioned for where consumer healthcare is heading, not where it’s been. And importantly, the company is delivering real profitability along the way.
Given that backdrop, I’m comfortable continuing to average in here and letting time, strong execution, and the newly launched buyback program deliver the shareholder value investors are looking for.