Hims & Hers Health Inc. (NYSE: HIMS) stock is holding onto a slight gain the day after the company delivered a mixed third-quarter earnings report. The caution centers around the company’s valuation, which makes it an outlier among healthcare stocks.
The company reported quarterly revenue of $598.98 million, a 49.2% year-over-year (YOY) increase and $20 million above analysts’ estimates. On the bottom line, earnings per share (EPS) of nine cents were in line with estimates, but down 71% YOY. That was reflected in the company's gross margin, which came in at 74% down 5% YOY.
On the subscriber front, Hims & Hers reported that the total number of subscribers increased by approximately 30,000 in the quarter. That’s a 20% YOY increase, which the company attributes to its focus on customers using personalized solutions.
Looking forward, an increase in subscribers is likely to bring topline growth. That’s also likely to bring earnings growth. Analysts are forecasting the company’s earnings to grow 79.3% in the next 12 months.
A New Deal With Novo Nordisk Could Shrink the Company’s Risk Premium
One highlight of the earnings report is the news that Hims & Hers and Novo Nordisk are in active discussions. If successful, Hims will be able to make Wegovy available on its platform in both the injectable and oral form.
It’s important to note that the company said there is no definitive agreement. In fact, Hims acknowledged the possibility that no deal will be made. That’s likely keeping a lid on HIMS stock.
Nevertheless, it’s not hard to see why investors would be excited about such a move. HIMS stock has increased by approximately 88% in 2025. However, how investors feel about the stock is a matter of timing. Those who bought the stock at its peak in February are sitting on a loss of around 34%.
One reason for the drop was the company’s ambitions with GLP-1. This was based on the company’s announcement that it would offer an affordable GLP-1 alternative to brand names such as Ozempic and Wegovy, which were struggling to keep up with demand.
Many investors bid the stock higher on the expectation that Hims & Hers Health would aggressively compete in a market experiencing explosive demand. However, investors will recall that Hims & Hers ran into regulatory concerns because its compounded GLP-1 drug was not FDA-approved and can vary in potency and formulation. The company also reported that it was taking a measured approach to the category.
Is Short Interest a Risk or An Opportunity?
The short interest in HIMS stock is approximately 35% of the stock’s float. That’s actually down about 3% in the last month, which should tell investors that there’s still considerable bearish sentiment among traders.
Hims & Hers has a forward price-to-earnings (P/E) ratio of 162x. That puts it on par with some of the pricey stocks in the tech sector. However, investors shouldn’t let a stock’s P/E ratio impact their buying decision too much in one way or another. It’s a helpful metric, but there are other factors to consider.
HIMS Stock Is Range Bound, But the Downside Risk Looks Contained
The post-earnings move in the stock confirms that HIMS stock is range-bound. There is a mixed sentiment among analysts, and the stock has a high degree of short interest. The earnings results were positive, but it remains to be seen if they were enough to drive the stock higher.
The technicals are indicating less downside risk in HIMS stock, which could make it an attractive investment even if the payoff is delayed. As of this writing, the stock is trading at $44.53, which is below its 50-day simple moving average (SMA). The daily volume is steady, indicating sustained, but not aggressive, market participation.
However, the relative strength indicator is around 42, which suggests limited buying conviction and could lead to further downside. Negative MACD lines indicate negative momentum, although they may be reversing.
It's a chart that signals caution, but if the stock holds above recent support levels around $41 per share, the downside should be limited.
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The article "Why Hims & Hers Stock May Be a Buy After Mixed Q3 Results" first appeared on MarketBeat.
