Why Hims & Hers Health Stock Just Crashed
Key Points
Hims & Hers missed horribly on earnings last night -- but raised sales guidance for the year.
Sales missed in Q1 as well, however.
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Hims & Hers Health (NYSE: HIMS) stock tumbled 12% through 11:15 a.m. ET Tuesday after missing badly on Q1 earnings last night.
Heading into the report, analysts forecast the telehealth company, made famous for selling discount GLP-1 weight loss drugs (and getting sued repeatedly for it), would earn a tiny $0.01 per share profit on sales of $616.5 million. In fact, Hims & Hers lost $0.40 per share, and revenue was only $608 million.
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Hims & Hers Q1 earnings
Sales grew only 4% in the quarter, despite subscriber growth of 9%. (Which is to say, this may be a story of more consumers spending less money at Hims & Hers.)
Accentuating the positive, though, CEO Andrew Dudum insisted Hims & Hers is "not just growing, we're pulling away from the field on our path to becoming the world's largest consumer health platform." More than just adding customers, Hims & Hers is entering new markets, expanding into new drug categories, and focusing on "comprehensive diagnostics" to help differentiate itself as a provider of personalized healthcare.
At the same time, it's not abandoning the GLP-1 market at all. Rather than risk more lawsuits, Hims & Hers is focusing on reselling branded GLP-1 products from the major manufacturers, including Eli Lilly's (NYSE: LLY) Mounjaro and Zepbound and Novo Nordisk's (NYSE: NVO) Wegovy and Ozempic.
What's next for Hims & Hers stock?
Turning to guidance, Hims & Hers expects all these efforts to pay off in the form of faster sales growth, projecting $2.8 billion to $3 billion by the end of this year and $6.5 billion in 2030 sales.
GAAP profits remain elusive, but Hims & Hers generated positive free cash flow of $53 million in the quarter -- putting it on course to generate perhaps $200 million this year.
Should you buy stock in Hims & Hers Health right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Hims & Hers Health. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
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