Hims stock tumbled Tuesday — but pared even worse losses — after the obesity-fighting kingpin lagged Wall Street's second-quarter sales forecasts. However, profit came in above expectations.
San Francisco-based Hims & Hers Health reported $544.8 million in sales, up 73% year over year. But that missed more bullish forecasts for $552 million, according to FactSet. Adjusted profit more than tripled year over year to 19 cents per share, topping calls for 15 cents.
Despite the sales setback, the company reiterated its outlook for the year.
"It's never been more clear that we are delivering exactly what millions of people have been waiting for: access to personalized, high-quality care that meets people where they are," Chief Executive Andrew Dudum said in a statement.
On the stock market today, Hims stock fell 12.4%, closing at 55.52. That improved from a bigger double-digit loss in after-hours trading on Monday.
Hims Stock: Focus On Personalization
Hims & Hers Health is known for selling less expensive, compounded versions of branded drugs. In the aftermath of a Food and Drug Administration decision, however, Hims and other compounders can no longer sell the same dosage as their branded counterparts.
So, Hims & Hers is leaning into personalization.
Ethan Feller, a stock strategist at Zacks Investment Research, says Hims will likely remain a market darling. The number of subscribers grew 31% to 2.4 million while monthly average revenue per subscriber grew 30%.
"With this kind of growth, and plans to expand business verticals and geographies, the company is firing on all cylinders and continues to define what personalized healthcare looks like," he said in an email to Investor's Business Daily.
Further, he noted the number of subscribers using personalized treatment plans for multiple conditions has "exploded" nearly 170% to 500,000.
"That shows this isn't a one-and-done platform, and customers are sticking around to broaden their care," he said.
An Asterisk In Hims' Guidance
Hims reported about $190 million in revenue from its GLP-1 business, Leerink Partners analyst Michael Cherny said in a client note. This included branded and compounded weight-loss drugs and diabetes treatments.
And the company kept its outlook for $2.3 billion to $2.4 billion in full-year sales, in line with the Street's forecast for $2.35 billion.
But with expectations for $50 million in sales from the European acquisition of Zava, "something in the HIMS outlook had to slow," Cherny said. The company has said it expects about $725 million in sales this year from the GLP-1 business.
Cherny kept his market perform rating on Hims stock, but raised his price target to 43 from 42.
Shaking Off The Novo Dustup
Hims & Hers also guided to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $295 million to $335 million. Analysts projected $324 million.
Hims stock is also shaking off a recent dustup with Novo Nordisk. Though the companies ended their short collaboration, Hims stock broke out of a consolidation with a buy point at 67.37. Later, Hims stock fell as much as 8.4% below its entry, triggering a sell rule.
Still, Hims stock has risen markedly this year. Shares rank fourth on the IBD 50 list of elite growth stocks.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
