The Case for Hims & Hers Health: Why the Market is Wrong About the GLP-1 Shakeout

📢 Update — September 15, 2026: We're Taking Profit. Here's Why.

It's been about three and a half months since I first published this thesis on June 2, and a lot has happened. I promised to update this post whenever there was something meaningful to share. This qualifies. We had a chance to sell in the green, we didn't, the stock went on a wild ride, and now we're back roughly where we started — at around $28.81 today versus the original price of $27.58.

Here's the honest recap of what happened, what we think about it now, and what we decided to do.

🎢 What Happened to the Stock Since June

After the June 7 update, the stock did what we hoped — it gradually climbed back above $30. At some point in late July it was trading around the $31–32 range. That was the window to take profit. We didn't.

Then on July 29, the U.S. Federal Trade Commission (FTC — the government agency that protects consumers from unfair business practices) filed a lawsuit against Hims & Hers. The stock dropped 14.7% in a single day, crashing from around $29 to $25.00. That one event erased all the gains and then some.

Then on August 10, Hims released its Q2 earnings. Revenue was excellent — but the earnings per share number was a disaster. The stock closed at $31.77 that day, then fell back 6.3% in after-hours trading once the EPS number came out. Classic "revenue up, stock down" moment, and we'll explain why in a second.

Today, September 15, the stock is back near where we started — up about 4% from our original entry.

📊 Q2 Results: Good Revenue, Ugly Profit

The Q2 numbers released on August 10 were a real mixed bag.

The good: revenue came in at $753 million, up 40% compared to the same quarter last year. That beat analyst estimates by around 8%. Subscriber count grew to 2.9 million, up 19% year-over-year. International revenue exploded to $131 million — that's 17 times higher than a year ago, boosted by the Eucalyptus acquisition and new markets. Management raised their full-year target to $3.1–3.3 billion.

The not-so-good: the company lost $0.37 per share, when analysts expected a loss of only $0.05. That's a massive miss. Where did the money go? Three things hit at once — $47.5 million set aside for the FTC lawsuit (more on that below), $28.8 million in acquisition costs from buying Eucalyptus, and ongoing restructuring charges. On top of that, gross margins fell from 76% a year ago to 64% today, because selling branded Wegovy and Ozempic pays less than the old compounded versions did.

So the business is genuinely growing. But the path to actual profitability keeps getting pushed further out.

⚖️ The FTC Lawsuit — What Actually Happened

This is the event that hurt us most, and it's worth understanding properly.

The FTC, alongside the states of Utah and California, sued Hims & Hers on July 29. The complaint has two main accusations.

First: Hims allegedly shared customers' sensitive medical information — things like which health conditions they were seeking treatment for — with advertising platforms like Meta (Facebook/Instagram) and Snapchat, without proper consent. All while the company was telling customers their information was private.

Second: The FTC says Hims charged customers for prescriptions almost immediately after they filled out an intake form, before they even had a proper consultation with a doctor. They also allegedly made it difficult for people to cancel their subscriptions.

Hims called the allegations "baseless" and said they will fight it in court. But here's the thing that tells us they're taking it seriously: they already set aside $47.5 million in Q2 specifically for this lawsuit. Companies don't reserve that kind of money for cases they're confident they'll win.

Looking at what happened to similar companies: Cerebral, another telehealth company, paid $7 million for similar privacy violations. GoodRx settled for $25 million. For a company Hims' size, the financial penalty might land in the $20–50 million range — painful but manageable given they still have over $750 million in cash.

The bigger long-term concern is behavioral. If the FTC restricts how Hims can use health data in their advertising, their ability to cheaply acquire new customers gets less efficient. That's an ongoing margin headwind, not just a one-time fine.

🤔 Why Didn't the Stock Run After a 40% Revenue Beat?

Fair question. The answer is that markets, especially for growth companies, care about profitability and margins more than raw revenue. When Hims reports gross margins falling from 76% to 64%, and posts an $86 million net loss for the quarter, investors interpret that as "this business is more expensive to run than we thought." Even a strong revenue number gets overshadowed when profits are moving in the wrong direction.

There's also the matter of trust. Two consecutive quarters of massive EPS misses — Q1 missed by roughly 1,400%, Q2 missed by 640% — makes investors cautious about believing the next set of guidance numbers. Until Hims can show revenue growth and margin recovery in the same quarter, the stock will keep struggling to hold its gains after earnings day.

🔭 Is Q3 Guidance Achievable?

Hims guided for $880–$900 million in Q3 2026, which would be 47–50% growth year-over-year. That's ambitious but probably reachable on the revenue side. The international business is scaling quickly, Australia launched in late August, and the domestic GLP-1 business continues to add subscribers. Analyst consensus is actually $892 million — basically in line with management's midpoint.

What won't be clean: EPS will likely miss again because of ongoing legal costs and Eucalyptus integration expenses. So we'd expect the same pattern — revenue beat, EPS miss, muted or negative stock reaction on the day.

Q3 results are due on November 9, 2026.

💼 Our Decision: Selling and Stepping Back

After going through all of this — the FTC lawsuit, the margin compression, the back-to-back EPS misses — we decided to sell our position at today's price and take the 4% gain.

The reasoning is straightforward. There are two upcoming events that could easily push the stock lower before any meaningful recovery:

November 2 is the deadline for securities class action lawsuits to file their lead plaintiff applications. This means a wave of law firm press releases, headlines about investor losses, and general negative noise — all of which tends to weigh on a stock in the short term even if it doesn't reflect the underlying business.

November 9 is Q3 earnings — a binary event. A big revenue beat could lift the stock 10–15%. Another EPS miss with no sign of margin recovery could push it back toward $24–25. We're not confident enough in which direction it goes to hold through both events.

The long-term thesis on Hims hasn't changed. The GLP-1 market is real and enormous — currently $68 billion globally, on track for $195 billion by 2035. The subscriber base is healthy and growing. International expansion is ahead of schedule. We still believe in the company's direction.

But believing in a company and holding the stock through near-term binary risk are two different decisions. Right now, stepping aside feels like the right call.

📅 Key Dates to Keep on Your Radar

• November 2, 2026 — Class action lead plaintiff deadline. Expect headline noise, possible dip.

• November 9, 2026 — Q3 earnings. The real test of whether revenue acceleration and any margin recovery are coming together.

We'll be watching both dates closely. If the setup looks right and we decide to re-enter, we'll share that here. If it doesn't, you may not hear from us on HIMS for a while — and that silence means we haven't found a reason to buy back in yet.

For now, the trade is closed. A small gain banked, a lot learned.

What the article gets right ✅

The GLP-1 demand thesis is ironclad. The global GLP-1 receptor agonist market is expected to grow at a CAGR of 12.4% from 2026 to 2033, reaching approximately $185 billion by 2033. The article's core premise — that the market overreacted to the compounding ban — is defensible. The June 2, 2026 completion of the Eucalyptus deal expands Hims & Hers' global digital health footprint across Australia, Canada, Germany, Japan, and the UK, cementing its position as what it calls the world's largest consumer health platform. That's genuinely exciting. | Grand View Research | TipRanks |

Where the article failed its readers ❌

The balance sheet claim is factually wrong — and this is serious.The article says HIMS has "absolute zero long-term bank debt." That was already false when it was written. On May 21, 2026, Hims & Hers Health issued $402.5 million of senior unsecured convertible notes maturing June 1, 2032, with an initial conversion price of about $29.53 per share. This came on top of the $1.0B convertible notes already on the books from 2025. True convertible debt load: ~$1.4B. Net cash is now effectively negative when you back out the $751M in cash. The "fortress balance sheet" narrative was a significant omission. | TipRanks |

The Q1 miss was brutal, not "transitional." Hims & Hers missed Q1 2026 on revenue ($608.1M vs. consensus $616.85M) and earnings (–$0.40 EPS vs. expected $0.03), with restructuring costs pressuring profitability with a $92M GAAP net loss. That EPS miss is over 1,400%. The article doesn't mention it. | 24/7 Wall St. |

Margins are structurally compressed. Selling branded drugs at Novo's self-pay prices will likely generate lower margins than compounded alternatives. This transition, while strategically sound for removing regulatory risk, creates near-term headwinds for profitability. Gross margins fell from 73% → 65% in one quarter. Recovery is not guaranteed. | barchart |

Political risk is real and omitted. Senator Jim Banks reportedly urged the FDA to examine advertising, pricing and subscription practices at Hims & Hers and other telehealth providers, raising concerns about the marketing of compounded GLP-1 products and pricing of branded therapies like Zepbound. | Stocktwits |

Is the $38 target right?
Not in the near term. The consensus 12-month price target heading into Q1 results stood at $31.86, with short interest remaining elevated above 35% of the available float, equivalent to nearly 70 million shares held short. Post-Q1, BofA cut to $30, Leerink is at $25, and Truist is at $23. The article's $38 target is optimistic relative to where the Street actually sits. | Rolling Out |

My call as of June 7, 2026
Tactical HOLD, accumulate below $24. The long-term thesis is alive. It is estimated that upwards of 30 million Americans will be on GLP-1 treatment in 2030, an increase of 10 million from those on branded GLP-1s in 2026, making the growth of GLP-1s one of the key storylines to watch. HIMS is well-positioned for that wave. But the next critical data point is Q2 results on August 10, 2026 — if they hit the guided $680–700M, the stock rereates meaningfully. If they miss again, the bear case at $16–20 becomes credible fast. Don't chase this — let the Q2 report do the work. | J.P. Morgan |

Not investment advice. For educational purposes only.