In an era where digital
healthcare and wellness platforms are surging in popularity, Hims & Hers
Health (NYSE: HIMS) stands out as a compelling growth story. With its recently
reported Q3 2025 earnings, the company presents a mixed but overall promising
picture: robust top-line expansion paired with some near-term margin and cash
flow pressures. From my analysis of the figures, Hims & Hers appears to
offer great growth and relatively good value, especially for investors willing
to accept some risk and look toward the mid-to-long term. In this article we
will dive into Hims & Hers recent earnings, stock performance &
valuation, growth potential, and the risks investor should consider.
About Hims & Hers
Hims & Hers, founded in 2017,
is a publicly traded telehealth and wellness platform that connects consumers
with licensed healthcare providers across the U.S. and abroad. Its model offers
personalized, on-demand treatment for sexual health, hair care, mental
wellness, and more through digital intake, provider review, and pharmacy
fulfillment. With a mission to make healthcare accessible and affordable, the
company is evolving into a multi-specialty, subscription-driven platform aiming
to scale offerings, enhance engagement, and lead the growing digital health and
wellness market.
Hims & Hers Financial
Performance
Hims & Hers delivered a
strong Q3 2025 financial performance, highlighted by revenue of $598.98
million, up 49.16% from $401.56 million in Q3 2024. Quarterly EPS came in at
$0.06, down sharply from $0.32, a decline of 80.27%, due largely to last year’s
unusually high tax benefit. On a trailing-twelve-month basis, revenue reached
$2.21 billion, rising 78.02% from $1.24 billion, while TTM EPS improved 20.76%
to $0.54 from $0.44. However, free cash flow per share TTM fell 25.35% to $0.53
from $0.71. Profitability metrics remained solid, with a 75.01% gross profit
margin, 6.05% net profit margin, and 6.06% free cash flow margin, supported by
a 5.56% return on asset and 26.21% return on equity, though the company
maintains a relatively high 1.92 debt-to-equity ratio.
Over the past five years, Hims
& Hers has grown its revenue at a 76.5% CAGR, while net income and free
cash flow have turned positive and are rising rapidly. The company is still
projected to grow quickly as it expands its telehealth business.
Hims & Hers Fiscal 2025
Financial Forecast
Analysts expect continued growth
ahead, forecasting $2.35 billion in 2025 revenue, up 58.9% from 2024 of $1.48
billion, and projecting 2025 EPS of $0.48, a 10.13% decrease from $0.53.
Overall sentiment is neutral, with Wallstreet analysts assigning a Hold rating
and a $46 price target, a potential 26.86% upside. While the highest target of $85
suggests a significant 134.39% upside.
HIMS Stock Price Performance
and Valuation
At the time this article was written HIMS stock was trading at $36.26 per share. Hims & Hers has delivered impressive returns, rising 72.7% over the past year and significantly outperforming the S&P 500’s 12.2% gain. Over a five-year period, the stock is up 254.4%, again beating the market’s 85.7% increase.
Despite this strong
performance, the company’s valuation remains relatively reasonable for a
high-growth business, with a P/S ratio of 3.88, forward P/S of 3.66, P/E of
66.27, forward P/E of 74.7, and P/FCF of 61.65.
Based on Fiscal.ai data, the
valuation since 2024 shows that the forward P/S and forward P/E ratios are
close to their averages, while the P/FCF is above the average. Although the
stock may appear expensive based on earnings and free cash flow which is
reasonable for a company that just turned profitable, the forward P/S remains
very low for a company with such high revenue growth.
Hims & Hers Growth
Potential
Hims & Hers growth prospect
remains robust driven by several factors.
- Accelerating Subscriber Growth
and Market Expansion Opportunities
The company's subscriber base reached 2.47 million in Q3 2025, growing 20% year-over-year with sequential additions above 30,000. This steady growth showcases Hims & Hers' strong market position and effective customer acquisition even amid a competitive telehealth environment. Notably, subscribers managing multiple health conditions surged 80% year-over-year and now comprise over 20% of the platform, signaling a shift toward integrated, multi-condition care. This trend enhances cross-selling opportunities and boosts customer lifetime value by addressing diverse health needs in one place.
Internationally, the ZAVA acquisition brings 1.3 million customers across the UK, Germany, France, and Ireland, offering immediate scale in untapped markets. With international expansion poised to generate over $1 billion annually, Hims & Hers aims to diversify revenue beyond the U.S. The company targets $6.5 billion in revenue by 2030, solidifying its role as a key digital health player despite regulatory challenges. - Strategic Specialty Expansion
Creating New Revenue Streams
Hims & Hers has broadened its specialty offerings beyond sexual health, dermatology, mental health, and weight loss by launching menopause care and testosterone replacement therapy in 2025. It plans to introduce longevity, sleep, and preventative medicine specialties in 2026, addressing large unmet markets. The Hers platform now serves over half a million subscribers, with menopause care forecasted to exceed $1 billion in revenue by 2026. The company focuses on integrated care pathways, using diagnostic insights to personalize treatments and improve retention.
Its diagnostics capability enhances comprehensive health monitoring. The weight loss segment alone is projected to generate $725 million in 2025, underscoring the scalability of each specialty. Global expansion, including a 2026 entry into Canada and the recent ZAVA acquisition, complements the broadening portfolio, supporting a diversified, technology-driven healthcare ecosystem primed for growth and improved margins. - Strategic Investments in
Technology and AI Infrastructure
Hims & Hers is significantly advancing its technology through a major $870 million convertible notes financing in 2025, targeting accelerated AI development and global growth. The company is building a continuously learning AI-powered care platform that enhances patient retention, boosts profit margins, and lowers long-term customer acquisition costs. Vertical integration efforts include acquiring Trybe Labs for at-home lab testing and establishing a U.S.-based peptide manufacturing facility, improving supply chain control and enabling more personalized treatments.
Management aims to scale infrastructure from 10,000 to 20,000–40,000 daily visits, investing heavily in decision-support AI tools for providers and advanced post-treatment patient engagement. These strategic tech investments create strong competitive barriers by leveraging data, improving clinical outcomes, and enhancing operational efficiencies, making Hims & Hers difficult to replicate in the digital healthcare space.
Risks to Consider
While Hims & Hers looks like
a good investment opportunity, we should be mindful of potential risks.
- Margin Pressure from Intense
Competition and Price Wars
Novo Nordisk has cut Wegovy’s price to $349 per month for cash-paying patients, intensifying competition in the GLP-1 weight-loss market. This forces Hims & Hers to differentiate mostly through service quality rather than price. Meanwhile, larger telehealth competitors with better infrastructure may raise customer acquisition costs, which probably contributing to Hims & Hers’ Q3 net income decline to $15.8 million, squeezing its profitability and growth potential. - Legal and Litigation Risks
Ongoing scrutiny and lawsuits may arise from FDA actions and claims of illegal practices by Hims & Hers. Novo Nordisk ended its partnership due to allegations of "illegal" and "deceptive" sales of compounded Wegovy versions. This led to a sharp drop in HIMS stock and potential legal liabilities. Investors allege the company misled about regulatory compliance and revenue, exposing patients to risks with unauthorized drug versions. - Brand Trust and Execution
Risks in Sensitive Categories
Expanding into complex fields like testosterone therapy, menopause, and longevity requires flawless clinical outcomes. Any errors or quality concerns could harm Hims & Hers' credibility, reduce subscriber retention currently strong at over 2.4 million and increase volatility in the crowded consumer health space. Maintaining high patient satisfaction and service quality is critical to sustaining growth and managing risks in these high-stakes healthcare markets.
Read More: Duolingo Stock (DUOL) Great Growth and Good Value in Q3 2025
Conclusion
Hims & Hers demonstrates strong momentum supported by rapid revenue growth, solid margins, and a scalable digital health platform. While near-term pressures on EPS and free cash flow exist, the company’s long-term growth prospects, expanding market reach, and increasing customer engagement highlight a compelling investment case. With the stock outperforming the market and valuations still reasonable for a high-growth business, HIMS remains an attractive opportunity for investors seeking exposure to the growing telehealth and wellness sector.
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