Hims & Hers Revenue Continues to Surge. Is It Time to Buy the Stock?

Hims & Hers Health reported robust Q3 results, with revenue increasing 49% year-over-year to $599 million, surpassing guidance and analyst consensus, driven by 21% subscriber growth and a shift towards personalized treatments. Adjusted EBITDA rose 53% to $78.4 million, though gross margin saw a 500 basis point decline. Significantly, the company is in active discussions with Novo Nordisk to reintroduce Wegovy to its platform, following a prior collaboration's termination. Management narrowed its 2025 financial guidance, and the stock is viewed as attractively valued given its strong growth trajectory and valuation metrics.

Analysis

Hims & Hers Health (HIMS) delivered a robust Q3 performance, with revenue surging 49% year-over-year to $599 million, surpassing both its own guidance and analyst consensus. This growth was underpinned by a 21% increase in subscribers to 2.47 million, notably driven by a 50% jump in personalized treatment users, which now constitute over 65% of the subscriber base. Adjusted EBITDA also saw significant expansion, climbing 53% to $78.4 million, reflecting improved operating leverage as marketing expenses decreased to 39% of revenue from 45% a year prior.

Despite strong top-line metrics, the company experienced a 500 basis point year-over-year decline in gross margin to 74%. Reported EPS of $0.06 missed the $0.09 analyst consensus; however, this miss was attributed to a fair value change related to earn-outs from the Zava acquisition, indicating underlying earnings met expectations. Management narrowed its 2025 revenue guidance to $2.335 billion-$2.355 billion and adjusted EBITDA guidance to $307 million-$317 million, signaling increased confidence in its near-term financial outlook.

A significant strategic development is Hims & Hers' active discussions with Novo Nordisk (NVO) to reintroduce Wegovy to its platform, which could be a substantial growth catalyst following a prior collaboration's termination. From a valuation standpoint, the stock appears attractively priced, trading at a forward P/E of approximately 32.5x based on 2026 analyst consensus and a PEG ratio of around 1x, suggesting potential undervaluation for a high-growth subscription business.

Key Decisions for Investors

• Consider HIMS for long-term growth portfolios, given its consistent revenue expansion, improving operating leverage, and attractive valuation metrics relative to its growth trajectory.
• Monitor the progress of discussions with Novo Nordisk regarding the reintroduction of Wegovy, as a successful agreement could significantly enhance HIMS's product offerings and market position.
• Evaluate the company's ability to manage gross margin pressures while sustaining subscriber growth and personalized treatment adoption, which are critical for continued profitability enhancements.