By Christy Santhosh
May 12 (Reuters) – Shares of Hims & Hers Health fell 11% on Tuesday after the telehealth company’s pivot to branded weight-loss drugs drove up costs and led to a surprise loss in the first quarter.
The company missed Wall Street estimates for first-quarter revenue, with the transition from cheaper, compounded versions of GLP-1 drugs to branded ones hitting sales and contributing to higher restructuring costs.
The telehealth firm said late Monday that a shift to shorter shipping schedules led to a change in revenue recognition timing for some weight-loss products, affecting its U.S. top line.
Hims & Hers is now partnering with branded drugmakers to offer treatments such as Novo Nordisk’s Wegovy on its platform, after the FDA moved to restrict copycat weight-loss drugs.
Shares fell to $25.95 in morning trading, set to wipe about $730 million from the company’s market value.
RETURN TO PROFIT IN 2027
Hims & Hers expects to return to profit in 2027, banking on recent acquisitions, a shift to branded drugs and a regulatory push to expand peptide access.
“We view HIMS as an execution story now, but investors want to ensure that the co’s earnings power has bottomed before driving the stock much higher,” said Jefferies analyst Brian Tanquilut.
Some brokerages maintained their rating for Hims, with J.P. Morgan characterizing the quarterly results as “no worse than feared.”
“The combination of a more stable weight-loss business, peptide legalization and revenue reacceleration in the second half creates a compelling catalyst path,” said J.P. Morgan analyst Cory Carpenter.
The company reported a loss of 40 cents per share for the three months ended March 31, missing analysts’ average estimate of a 4-cent profit, according to LSEG data.
Chief Financial Officer Yemi Okupe attributed the loss to write-downs on semaglutide compounding ingredients, one-time legal costs and merger expenses.
(Reporting by Christy Santhosh and Sriparna Roy in Bengaluru; Editing by Joyjeet Das and Tasim Zahid)
Comments