Hims & Hers Health shares plunged 18% in prolonged trading on Monday after investors looked past better-than-expected revenue and earnings and focused as a substitute on the disappointing gross margin.
Here’s how the corporate did, in comparison with analysts’ consensus estimates from LSEG:
- Earnings per share:Â 11 cents vs. 10 cents expected
- Revenue: $481 million vs. $470 million expected
Revenue on the telehealth company increased 95% within the fourth quarter from $246.6 million in the course of the same period last 12 months, in accordance with a release.
Nonetheless, the corporate’s gross margin, or the profit left after accounting for the associated fee of products sold, was 77%, while analysts polled by StreetAccount were expecting 78.4%.
It’s the second big stock drop for Hims & Hers in a matter of days. The shares tumbled 26% on Friday after the U.S. Food and Drug Administration announced that the shortage of semaglutide injection products has been resolved.
In May, Hims & Hers began prescribing compounded semaglutide, the lively ingredient in Novo Nordisk’s blockbuster GLP-1 medications Ozempic and Wegovy. The corporate was a breakout star inside the digital health sector in 2024, partly due to success of its popular recent weight reduction offering.
The corporate said its GLP-1 offering generated greater than $225 million in revenue in 2024. The stock climbed about 200% for the 12 months.
Compounded drugs are custom-made alternatives to brand-name drugs designed to fulfill a selected patient’s needs, and compounders are allowed to supply them when brand-name treatments are in shortage. The FDA said Friday that it’ll start taking motion against compounders for violations in the subsequent 60 to 90 days.
Hims & Hers said on the earnings call that in consequence, compounded semaglutide will likely not be offered on the platform after the primary quarter.
“We may have to start out notifying customers in the approaching month or two that they’ll need to start out searching for alternative options on the industrial dosing,” Hims & Hers CEO Andrew Dudum said on the decision. “I might suspect, just being very direct, that a number of those patients will try to enter the open market and check out to secure a branded option in some form factor.”
Some patients might still have the opportunity to access compounded semaglutide whether it is clinically essential, the corporate added.
The corporate’s weight reduction offerings will primarily be composed of its oral medications and the generic medication liraglutide, which it plans to introduce on its platform this 12 months. Excluding contributions from compounded semaglutide, Hims & Hers said it expects it weight reduction offering will generate at the least $725 million in revenue in 2025.
Hims & Hers also offers treatments for skincare, mental health, sexual health and hair care.
Revenue for non-GLP-1 products increased 43% to $1.2 billion for the complete 12 months, “meeting our previous 2025 revenue goal a 12 months early,” Chief Financial Officer Yemi Okupe said in a release.
“The success we’re experiencing is a direct reflection of our improving ability to democratize access to prime quality, personalized care across each of our specialties,” Okupe said.
Net income climbed to $26.01 million, or 11 cents per share, from $1.25 million, or 1 cent per share, a 12 months prior. The corporate reported adjusted earnings of $54.1 million, meeting analysts’ estimates, in accordance with StreetAccount.
For the primary quarter, Hims & Hers expects to report revenue of $520 million to $540 million, while analysts were expecting $497 million. Adjusted earnings can be between $55 million and $65 million for the period, the corporate said. Â
Hims & Hers will host its quarterly call with investors at 5:00 p.m. ET.
— CNBC’s Brandon Gomez contributed to this report.
