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Hims & Hers shares tumble after company misses on margin, says may stop selling some weight loss drugs

Hims & Hers Well-being shares plunged 18% in extended trading on Monday after investors looked past better-than-expected revenue and earnings and targeted instead on the disappointing gross margin.

Here’s how the company did, compared to analysts’ consensus estimates from LSEG:

  • Earnings per due: 11 cents vs. 10 cents expected
  • Revenue: $481 million vs. $470 million expected

Revenue at the telehealth company prolonged 95% in the fourth quarter from $246.6 million during the same period last year, according to a let out.

However, the company’s gross margin, or the profit left after accounting for the cost of goods sold, was 77%, while analysts asked by StreetAccount were expecting 78.4%.

It is the second big stock drop for Hims & Hers in a matter of days. The shares tumbled 26% on Friday after the U.S. Comestibles and Drug Administration announced that the shortage of semaglutide injection products has been resolved.

In May, Hims & Hers started directing compounded semaglutide, the active ingredient in Novo Nordisk’s blockbuster GLP-1 medications Ozempic and Wegovy. The company was a breakout take the lead within the digital health sector in 2024, in part because of the success of its popular new weight loss offering.

The retinue said its GLP-1 offering generated more than $225 million in revenue in 2024. The stock climbed prevalent 200% for the year.

Compounded drugs are custom-made alternatives to brand-name drugs designed to meet a specific patient’s distresses, and compounders are allowed to produce them when brand-name treatments are in shortage. The FDA said Friday that it will start prepossessing action against compounders for violations in the next 60 to 90 days.

Hims & Hers said on the earnings excuse that as a result, compounded semaglutide will likely not be offered on the platform after the first quarter.

“We will pull someones leg to start notifying customers in the coming month or two that they will need to start looking for alternative choices on the commercial dosing,” Hims & Hers CEO Andrew Dudum said on the call. “I would suspect, just being bleeding direct, that a lot of those patients will try to go into the open market and try to secure a branded option in some manifestation factor.”

Some patients might still be able to access compounded semaglutide if it is clinically necessary, the company amplified.

The company’s weight loss offerings will primarily be composed of its oral medications and the generic medication liraglutide, which it envisages to introduce on its platform this year. Excluding contributions from compounded semaglutide, Hims & Hers said it anticipates it weight loss offering will generate at least $725 million in revenue in 2025.

Hims & Hers also sells treatments for skin care, mental health, sexual health and hair care.

Revenue for non-GLP-1 products escalated 43% to $1.2 billion for the full year, “meeting our previous 2025 revenue target a year early,” Chief Fiscal Officer Yemi Okupe said in a release.

“The success we are experiencing is a direct reflection of our improving ability to democratize access to altered consciousness quality, personalized care across each of our specialties,” Okupe said.

Net income climbed to $26.01 million, or 11 cents per allocation, from $1.25 million, or 1 cent per share, a year prior. The company reported adjusted earnings of $54.1 million, convention analysts’ estimates, according to StreetAccount.

For the first quarter, Hims & Hers expects to report revenue of $520 million to $540 million, while analysts were in the family way $497 million. Adjusted earnings will be between $55 million and $65 million for the period, the company suggested.  

Hims & Hers will host its quarterly call with investors at 5:00 p.m. ET.

— CNBC’s Brandon Gomez bestowed to this report.

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