Hims & Hers (HIMS) Sees 69% Revenue Increase Despite GLP-1 Uncertainties
Stock Decline Amid FDA’s Resolution of Semaglutide Shortage
Hims & Hers Health (HIMS) has witnessed a 17% drop in its share value recently, following the FDA’s resolution of the semaglutide injection product shortage.
- This resolution impacts the company’s GLP-1 business, which relies on semaglutide, a key ingredient in Novo Nordisk’s weight loss drug Wegovy and diabetes treatment Ozempic.
- The company’s 69% revenue growth in 2024 is partly attributed to its GLP-1 business, which makes up about a third of its income.
GLP-1’s Role in Revenue Growth
Hims & Hers Health is a telehealth provider offering prescription and non-prescription products for wellness, sexual health, skincare, and haircare through its website and mobile app.
- The FDA’s resolution will lead to action against compounding companies creating custom substitutes for branded GLP-1 drugs.
- Amid the shortage, Hims & Hers started offering compounded semaglutide as a less expensive option. With the shortage ending, the company plans to explore legal options to maintain this product line.
Strong Financial Performance Despite Uncertainty
For Q4 2024, Hims & Hers reported a 95% year-over-year revenue increase, reaching $481.1 million, up from $246.6 million in Q4 2023.
- Key financial figures include $54.1 million in adjusted EBITDA, $86.4 million in net cash from operating activities, and $59.5 million in free cash flow.
- For 2024, total revenue surged to $1.47 billion, with a 69% year-over-year increase.
- Notably, revenue excluding GLP-1 still grew by 43%, reinforcing that the company’s success isn’t solely dependent on this business line.
Analysts Express Caution But See Potential
Despite the uncertainties surrounding the GLP-1 market, analysts are cautious about the stock’s outlook.
- Michael Cherny from Leerink remains optimistic, seeing a potential reset for Hims & Hers that could open up broader market access for both the patented drug and GLP-1 compounding.
- However, successfully navigating this path will require Hims & Hers to find legal ways to continue selling personalized semaglutide doses.