After another stellar quarterly performance from Hims & Hers Health (HIMS), the bearish arguments seem to be running out of steam. We’ve long argued that the market has misunderstood this company, failing to grasp its evolution into a genuine healthcare ecosystem rather than a mere compounding pharmacy or niche player. The latest results underscore a robust growth trajectory, negligible reliance on GLP-1 weight loss drugs, and a surprising resilience against legal headwinds that once spooked investors. Let’s unpack why the narrative around HIMS is shifting, and why this could signal a broader re-rating in the telehealth and personalised healthcare space.
The Bear Case Crumbles: A Quarterly Triumph
The most recent quarterly figures from Hims & Hers Health paint a picture of a company firing on all cylinders. According to data from Yahoo Finance, sales and net income for Q1 2025 have doubled year-on-year, a feat that few in the healthcare sector can match. Subscriber growth continues to impress, with numbers climbing steadily as the company expands its offerings beyond men’s health into broader wellness and chronic condition management. This isn’t just a one-trick pony riding the wave of trendy weight loss drugs; it’s a platform diversifying its revenue streams with precision.
What’s particularly striking is how the bears have been silenced on key concerns. Fears of over-dependence on GLP-1 drugs like Wegovy, which HIMS has recently made more accessible at affordable price points, appear unfounded. The company’s core revenue growth, while slowing slightly from a blistering 45% in Q3 2024 to 29% in Q1 2025 as noted by Bank of America analysts, still outpaces many peers in the telehealth arena. Even whispers of potential lawsuits tied to compounding practices or regulatory scrutiny have failed to dent operational momentum. It’s as if HIMS has donned a suit of armour forged from strong fundamentals.
Beyond the Numbers: A Healthcare Ecosystem in Bloom
Digging deeper, it’s clear HIMS is no longer just a telehealth upstart. It’s morphing into a comprehensive healthcare ecosystem, a term that’s often bandied about but rarely deserved. The company’s ability to integrate personalised treatments, mental health services, and chronic disease management under one digital roof positions it at the nexus of several megatrends: the digitisation of healthcare, the rise of consumer-driven wellness, and the push for affordability in a sector notorious for inflated costs.
Consider the second-order effects here. As HIMS scales its subscriber base, now well over 2 million, network effects kick in. More users mean more data, which fuels better personalisation and stickier customer retention. This isn’t merely a transactional business; it’s a platform that could, in time, rival traditional healthcare providers for mindshare among younger demographics. And with the recent push into affordable GLP-1 treatments, HIMS is tapping into a market desperate for accessible obesity solutions, a space where demand is projected to grow exponentially over the next decade.
Asymmetric Opportunities and Risks
For investors, the asymmetric opportunity in HIMS lies in its undervalued growth potential relative to the broader telehealth and digital health sectors. While multiples have compressed across high-beta growth stocks, HIMS trades at a discount to peers despite superior revenue growth and a clearer path to profitability. The risk, however, isn’t trivial. Regulatory overhang remains a wildcard, especially as the US healthcare system grapples with how to handle compounded medications and telehealth prescriptions. A single adverse ruling could spook the market, even if fundamentals remain intact.
Yet, sentiment appears to be shifting. Posts on social platforms reflect a growing chorus of optimism among retail investors, who see HIMS as a disruptor rather than a flash-in-the-pan. If this enthusiasm translates into institutional buying, we could see a sharp re-rating, particularly if HIMS continues to execute on its diversification strategy.
Forward Guidance: Positioning for the Long Game
So, where does this leave us? For those with a stomach for volatility, HIMS offers a compelling long-term play in the healthcare disruption narrative. The key is to focus on entry points; dips driven by macro fears or temporary regulatory noise could provide attractive opportunities to build a position. Conversely, if you’re more risk-averse, waiting for clarity on the legal front might be prudent, though at the cost of missing early upside.
Looking ahead, my speculative hypothesis is this: within the next 18 months, HIMS could emerge as a takeover target for a larger healthcare or tech giant seeking a foothold in telehealth. Think of a player like Amazon, which has already dipped its toes into healthcare with One Medical, or even a traditional pharma titan looking to modernise its distribution. If HIMS continues to build its ecosystem at this pace, its data trove and subscriber base might prove too tantalising to ignore. It’s a bold call, but one worth watching as the healthcare landscape continues to evolve at breakneck speed. After all, in a world where digital disruption is the name of the game, HIMS might just be the dark horse we didn’t see coming.
