Hims & Hers Stock (HIMS) Soars as Investors Ask ‘Boom or Bubble’?

Hims & Hers Health (HIMS) is one of the best-performing companies in the U.S. stock market right now, on the back of a catalyst-combo that includes strong Q1 2025 results and a joint venture. This follows an announcement in late April that the company had entered a partnership with pharmaceutical giant Novo Nordisk (NVO) that could fundamentally reshape its market position and future growth trajectory. Both news items have helped catalyze the stock’s double-digit value over the past thirty days. In the last five days alone, the stock is up 6.35%.

While investor enthusiasm for the stock is palpable, the jump in price has it trading at a healthy premium relative to sector peers. Given its heady valuation, I prefer to remain on the sidelines for now.

Good HIMS News Comes With Conditions

Hims & Hers reported $586 million in revenue for Q1 2025 — a phenomenal 111% increase compared to the same period last year. The profitability picture looked equally bright — net income soared to $49.5 million from just $11.1 million in Q1 2024, while adjusted EBITDA nearly tripled to $91.1 million.

The subscriber base grew to 2.4 million users, up 38% year-over-year. More importantly, monthly revenue per subscriber jumped 53% to $84, indicating successful upselling and improved customer engagement.

However, gross margin dropped from 82% to 73%, which is still healthy, but the decline signals potential pricing pressure from an increasingly competitive market. Earnings per share of $0.20 fell short of the $0.23 analysts expected. Further, the company’s second-quarter revenue guidance of $530-550 million underwhelmed a market with heightened expectations.

The Novo Nordisk Partnership

In late April, HIMS announced a partnership with Novo Nordisk that allows Hims & Hers to offer Wegovy, Novo’s FDA-approved weight loss medication, through its platform at $599 per month, bundled with comprehensive care and support. The stock soared on the news, and the good sentiment is still lingering.

Wegovy typically costs $1,349 monthly at retail pharmacies, while competitors like Eli Lilly’s (LLY) Zepbound run about $1,060. By offering the same FDA-approved medication at roughly half the price, Hims & Hers is now positioned as the value leader in the booming weight loss market.

The partnership addresses investor concerns that have recently plagued the company. Previously, Hims & Hers relied heavily on compounded versions of semaglutide (the active ingredient in Wegovy) during FDA shortage periods. With the shortage ending, the FDA announced changes marking the official end of obesity-drug shortages and curtailing bulk production of generic versions. HIMS stock fell by over 50%.

Avoiding a looming regulatory cliff with this strategic partnership has helped spur a dramatic recovery in investor sentiment.

An Ambitious 2030 Vision

Management has laid out an ambitious roadmap for the remainder of the decade. HIMS is targeting $6.5 billion in annual revenue by 2030 alongside $1.3 billion in adjusted EBITDA.

To achieve this growth rate, the company is exploring expansion beyond its current specialties in sexual health, dermatology, mental health, and weight loss. It plans to launch treatments for low testosterone and menopause in 2025. Future expansion possibilities include longevity care, sleep medicine, and preventive healthcare.

Hims & Hers Health shampoo and conditioner products

The strategy shift centers on personalization and data-driven care. By leveraging lab diagnostics, subscriber data, and wearable device integration, HIMS offers thousands of personalized treatment options rather than hundreds. This approach could create significant barriers to entry for competitors while optimizing revenue generation from existing customers.

Global expansion represents another growth avenue. While the company is currently focused on the U.S. market, international opportunities could unlock substantial revenue streams, particularly in markets with favorable telehealth regulations and growing digital health adoption.

The Factors Overshadowing HIMS

Several factors could derail Hims & Hers’ growth story. The telehealth industry faces increasing regulatory scrutiny, with potential changes to prescription requirements or interstate practice rules. Since Hims & Hers operates across state lines, regulatory shifts could significantly impact operations.

Further, competition is intensifying from all angles. Traditional healthcare providers are launching digital offerings, while new entrants target specific niches. The recent partnership between Eli Lilly and competitor Ro demonstrates how pharmaceutical companies seek multiple distribution channels, potentially reducing Hims & Hers’ negotiating power.

Also worrying is how customer acquisition costs continue rising, particularly in the lucrative weight loss segment. Profitability could suffer despite revenue growth if these costs increase faster than revenue per customer.

Finally, the ambitious 2030 targets require flawless execution across multiple initiatives. New product launches, international expansion, and technology investments must all succeed simultaneously—a challenging proposition for any organization.

Is HIMS a Good Stock to Buy?

Wall Street remains divided on HIMS’ future prospects, although bearish sentiment prevails. HIMS stock carries a Hold consensus rating based on four Buy, eight Hold, and two Sell ratings over the past three months. HIMS’s average price target of $45.54 implies approximately 18% downside potential over the next twelve months.

See more HIMS analyst ratings

Needham analyst Ryan MacDonald represents the bullish camp. He recently raised his price target to $61 while maintaining a Buy rating. MacDonald views the Q2 guidance disappointment as a buying opportunity, emphasizing that new category launches and portfolio expansion should drive long-term growth without compromising margins.

More cautious voices come from TD Cowen and Morgan Stanley analysts, who maintain hold ratings. They acknowledge the company’s strong brand and growth potential but express concerns about intensifying competition, margin pressure, and execution challenges. The slowdown in sexual health revenue and higher customer acquisition costs in the weight loss segment raise questions about growth rate sustainability in the medium-long term.

Apprehensive Investment Verdict on HIMS

Hims & Hers’ core business model addresses a genuine market need, and the Novo Nordisk partnership validates its approach while providing crucial supply chain security.

The stock offers exposure to several megatrends: aging demographics, increasing healthcare costs, and digital transformation. Meanwhile, the company’s ability to expand beyond its initial focus areas while maintaining competitive advantages suggests sustainable long-term potential.

However, the stock’s recent run-up has it trading at a rich valuation. Given its ambitious growth strategy, I prefer to hold off and wait for clearer margin trends and consistent quarterly execution before committing to a long-term investment.