Telehealth company Hims & Hers experienced a sharp decline in its stock price, dropping 15.5% in premarket trading on Tuesday following the release of its first-quarter earnings report, which revealed a net loss of $92 million. This loss was nearly double the $50 million reported in the same period last year. Adjusted EBITDA also fell significantly to $44 million from $91 million a year ago. Despite these setbacks, revenue increased by 4% to $608 million, though average monthly revenue per subscriber decreased to $80 from $85 last year [1].
Looking ahead, Hims & Hers provided guidance for the second quarter, expecting revenue between $680 million and $700 million and forecasting adjusted EBITDA up to $55 million. For the full year, the company anticipates revenue up to $3 billion and adjusted EBITDA up to $350 million. Citi analysts described the forecast as "mixed," noting that the second-quarter outlook was below their estimates and highlighting that the first quarter represents a "transition" phase as Hims & Hers reduces its reliance on compounded GLP-1 drugs [1].
The company has been embroiled in controversy regarding its sale of copycat GLP-1 weight loss drugs. In March, Hims & Hers reached an agreement with Novo Nordisk to sell the branded GLP-1 drug Wegovy on its platform and committed to stop advertising cheaper compounded versions. Novo Nordisk had previously threatened legal action, stating that Hims & Hers' sale of copycat Wegovy pills for $49—$100 less than Novo's price—was illegal mass compounding and posed significant risks to patient safety. Hims & Hers ceased selling the pill shortly after the backlash [1].
Hims & Hers' stock has historically reacted strongly to news affecting its ability to sell weight loss drugs, which have been highly profitable for the company. The firm previously exploited a regulatory loophole to sell copycat drugs during shortages, even after the shortage was resolved and despite the drug's patent protection until 2032. Novo Nordisk had briefly partnered with Hims & Hers to offer discounted treatments, but the deal ended quickly amid accusations of deceptive marketing and patient safety concerns. Novo Nordisk's CEO confirmed in March that Hims & Hers would no longer advertise compounded products upon receiving branded products [1].
CONCLUSION
Hims & Hers' first-quarter loss and weak guidance, coupled with ongoing controversy over its GLP-1 drug sales, triggered a significant drop in its stock price. The company's transition away from compounded drugs and mixed outlook have raised investor concerns. Market sentiment remains negative as regulatory and partnership issues continue to impact Hims & Hers' profitability and growth prospects.