HIMS & Hers Shares Plunge 22% on Concerns Over Weight Loss Business, Margins

Shares of Hims & Hers Health Closed Down 22% on Tuesday, A Day after the Telehealth Company Relieved Fourth -Quarter Results That disappointed on Gross Margin and Sparked Concerns about the future of its weight loss business.

Hims & hers reported $ 481 million in revealed for the Quarter, UP 95% From $ 246.6 Million during the same period last year. Net Income Climbed to $ 26.01 Million, or 11 cents per share, from $ 1.25 million, or 1 cent per share, a year prior.

But the company’s gross margin, or the profit left accounting for the cost of good, was sold, wasppointing analysts who expecting 78.4%, According to StreetCCONT.

In the company’s quarterly call with investors on monday, Chief Financial Officer Yemi Okupe Said the scaling of the company’s Glp-1 offering and its strategic pricing options were to blame.

Hims & Hers in May Started Prescribing Compounded Semaglutide, The active ingredient in Novo Nordisk‘S GLP-1 Weight Loss Medications OzEmpic and Wegovy. Compounded Drugs Can Be Produced when Brand-Name Treatments are in shortageBut the US Food and Drug Administration announced Friday that the shortage of semaglutide injection products have been resolved.

As a result, Hims & hers said monday that it will likely stop offering compounded semaglutide on its platform after its first Quarter, Thought Some Consures May Some Consures May Doses If clinically applicable. The GLP-1 offering generated more than $ 225 million in Revenue for the company in 2024.

“We will have to start notifying customers in the coming month or two that they will need to start looking for alternative options on the Commercial Dosing,” Hims & Hers CEO andrew dudum said on the call.

Going forward, the company said its weight loss offers

Analysts at Morgan Stanley said in a note tuesday that company’s report was “a lot to digest.” They maintained their equal-whect rating on the stock and said they were surprised by the magnitude of the company’s 2025 guidance.

HIMS & hers said it expects between $ 2.3 billion and $ 2.4 billion in revenue this year. The company added that it expects its weight loss offerings to generate at least $ 725 million in revenue, excluding contributions from compounded semaglutide.

“We remine positive on the long-term options, highlighting the company’s attractive platform and solid track recording that differential to related to digital health and dtcom,” the morgan Stanley analysts said.

Bank of America Analysts Said That While The company Risk “As Supply of Brand-Name GLP-1s Increases.

Additional, The Analysts Said Hims & Hers’ Competitors will like Advertising costs. They reiterated their underperform rating on the stock.

“Overall, we do not see UPSide to 2025 revidance and think the beat and raise story is likely over in the near-term,” The bank of america analysts wrote in a new.

CITI analysts mean they think hes & hers’ Revenue Guidance is “Aspirational,” as it would require “significant acceleration” in the use of its use of our weight losses. They said they are less confidence about the success of these offers.

Even so, the analysts increase their price target on the stock to $ 27 from $ 25.

“We Await a more Compeling Entry Point and More Details on Growth Ex-Glp-1s Before We Become more Constructive,” They Wrote in a Monday Note.

– CNBC’s Michael Bloom Contributed to this Report.