Hims & Hers Stock (HIMS) Down Sharply As Earnings Miss On Top and Bottom Lines

Hims & Hers Health stock price (NYSE:HIMS) has fallen sharply on earnings, currently trading down 13.35% at $54.89 in the pre-market.

This pullback follows the release Q2 earnings, with expectations high leading in to the print. The company missed estimates on both earnings per share (EPS) and revenue, which after a 151% YTD gain on the stock was always likely to be harshly treated.

Revenue of $544.8 million reflected an impressive 73% increase year-over-year, but crucially, below the consensus of $552.1 million. EPS came in at $0.17, also shy of the expected $0.23.

This marks the company's first-ever sequential revenue decline, adding to the negative sentiment surrounding the report. Despite achieving a net income of $42.5 million and an adjusted EBITDA of $82 million (exceeding a 15% margin), the negative free cash flow of $69 million, attributed to investments in inventory and working capital, further weighed on investor confidence.

CEO Andrew Dudum remained optimistic, stating, “It's never been more clear that we are delivering exactly what millions of people have been waiting for: access to personalized, high-quality care that meets people where they are.” He emphasized the company's plans to expand into new, high-impact specialties to broaden its platform and proactively manage overall health. However, markets reacted negatively to the immediate financial results, overshadowing the long-term strategic vision.

The stock's performance over the past year has been volatile. While HIMS reached an all-time high of $72.98 in February, it also holds a 52-week low of $13.47, highlighting the significant price swings. The current price, while still elevated compared to its longer-term moving averages (50-day SMA at $53.65 and 200-day SMA at $38.38), represents a notable pullback from recent highs.

Several factors contributed to the earnings miss. The transition away from commercially available GLP-1 dosages impacted revenue recognition, and a decline in the on-demand sexual health subscriber base is expected to continue affecting revenue in the short term.

Furthermore, anticipated increases in marketing and technology investments may pressure margins in the near term.

Looking ahead, consensus analyst estimates for the next quarter (Q3) EPS average $0.26, with full-year 2025 EPS expected at $1.09. However, the recent miss has cooled analyst sentiment in the short term.

“We believe we're entering an exciting period of growth,” Dudum stated, reinforcing the company's long-term outlook. However, markets will be closely watching Hims & Hers' ability to execute in the period's ahead, and maybe for the bulls to not get too far ahead of the company's own guidance.