The company just had its best year ever. Revenue hit $2.35 billion, up 59%. The stock fell 52% and is now sitting near a 52-week low of $13.75.
That’s Hims & Hers Health (NYSE: HIMS) in February 2026. The reason for the disconnect isn’t complicated: the FDA is threatening to shut down the one product that drove most of that growth — compounded semaglutide — and the market is pricing in a real probability that it succeeds.
Here’s what the numbers actually say, and whether the fear is priced in or overblown.
What Just Happened in Q4 2025
Q4 revenue came in at $617.8 million, up 28% year-over-year but just barely missing the $619.22 million analyst estimate — a rounding error. Gross margin slipped to 72% from 77% a year ago, the third consecutive quarter of compression as the company spends more on manufacturing compounded weight-loss drugs.
Full-year 2025, though, was legitimately strong:
- Revenue: $2,347.6M (+59% YoY)
- Net income: $128.4M (GAAP profitable)
- Adjusted EBITDA: $318M (~+80% YoY)
- Operating cash flow: $300M
- Balance sheet liquidity: $929M
Those are real numbers. But there are a few things under the hood worth knowing. Q4 free cash flow went negative — hitting -$2.6 million compared to +$59.5 million in Q4 2024. Product costs rose over 30% year-over-year. The company also ran a Super Bowl ad, which CFO Yemi Okupe confirmed will show up in Q1 2026 operating costs. Subscribers grew 13% to 2.511 million, each paying an average of $83 per month — up 11% from a year ago.
For comparison: Lemonade (LMND) had a similar dynamic in its last report — record results, stock fell anyway. The market doesn’t always price the quarter; it prices what it thinks the next 12 months look like. Right now, HIMS investors are pricing in a lot of uncertainty about what compounded weight-loss drugs look like in 12 months.
The GLP-1 Regulatory Minefield
Hims built its weight-loss business by selling compounded semaglutide — custom-formulated, significantly cheaper versions of Novo Nordisk’s Wegovy and Ozempic. When the FDA declared the semaglutide shortage officially over, compounding was supposed to stop. Hims found a legal workaround: personalization. Under U.S. law, compounders can still make drugs for individual patients if the formulation is customized — different dosage, added vitamins, modified delivery method.
That strategy was working. Then in early February 2026, Hims launched a compounded semaglutide pill at $49 per month — about one-tenth the cost of Wegovy’s new oral form. The FDA moved fast: it said it would take action against Hims and referred the company to the Department of Justice. Novo Nordisk filed a patent lawsuit the same month. The company disclosed in a regulatory filing that it doesn’t know what actions the FDA and DOJ may actually take.
CEO Andrew Dudum addressed this directly on the earnings call: “We believe there’s a really durable weight business even if you think you’re kind of in a draconian scenario of compounding GLP-1s not being there.” He said the majority of HIMS revenue and profitability comes from outside weight loss — hair, skin, mental health, sexual health, hormone therapy.
The company won’t say exactly how much revenue the GLP-1 business generates. That’s a notable omission given it’s the main thing the market wants to know right now.
2026 Guidance — Reading Between the Lines
Q1 2026 is already absorbing a $65 million headwind from changes to how personalized weight-loss products get shipped under the new regulatory framework. That’s why Q1 revenue guidance of $600 million to $625 million missed the $653 million estimate by nearly $30 million at the midpoint — a meaningful shortfall, not a rounding error.
Full-year 2026 guidance: $2.7 billion to $2.9 billion in revenue, with a $2.8 billion midpoint that came in slightly above the $2.74 billion consensus estimate. That headline looked positive. The EBITDA guidance was the problem: $300 million to $375 million, with a $337.5 million midpoint that came in below the $356.1 million estimate. The stock fell 7% after hours on earnings day.
The 2026 guidance also explicitly notes it “assumes the ongoing ability to provide access to compounded semaglutide through our platform, and no changes to our current business relationships.” That’s not a boilerplate disclaimer — it’s a meaningful contingency. If that assumption breaks, the guidance breaks with it.
The long-term target remains: $6.5 billion in revenue and $1.3 billion in adjusted EBITDA by 2030. That would be a 3x increase from 2025 levels over four years — aggressive, but not impossible if the regulatory situation resolves and international expansion succeeds.
The Eucalyptus Bet
One week before earnings, Hims announced the acquisition of Eucalyptus — an Australian digital health company operating in Australia, the UK, Germany, and Japan — in a deal valued at up to $1.15 billion. The deal is expected to close mid-2026, pending regulatory approvals.
International revenue grew 825% year-over-year in Q4 2025 (to $63.7 million), though from a small base. Eucalyptus would give HIMS an immediate multi-country footprint and accelerate diversification away from the U.S. GLP-1 market. Analysts noted the deal is a positive for long-term non-weight-loss growth.
The math is tight. The company has $929 million in liquidity. A deal worth “up to $1.15 billion” plus the normal cost of running a $2.5 billion revenue business means HIMS will likely need to raise capital or take on debt before the deal closes. Announcing a $1.15 billion acquisition while under active DOJ review is a bold capital allocation call.
What Wall Street Actually Thinks
Thirteen analysts cover the stock. The consensus is Hold — which in this case really means “we’re waiting to see what the FDA does before committing.” Average price targets vary by source: MarketBeat has $32.27, StockAnalysis shows $38.41. Either way, you’re looking at 110–150% upside to analyst targets from the current $15.37.
Bank of America is the most bearish voice with an Underperform rating and a $29 target, cut from $32. Their view: 2026 consensus estimates for revenue and EBITDA are still too high even after the guide, and the Q1 headwinds from personalization changes are being underestimated. That $65 million Q1 shipping change isn’t a one-quarter problem if the FDA keeps tightening the rules.
Leerink Partners offered a more nuanced take after earnings: international expansion is positive, but it doesn’t answer the central regulatory question. If GLP-1 compounding gets fully restricted, Eucalyptus adds growth potential but doesn’t replace the lost domestic revenue fast enough to matter in 2026.
Compare this to Amplitude (AMPL), where analysts had 95% upside priced in but a different kind of risk — slowing enterprise sales. HIMS has more upside potential and more binary downside risk. Not the same setup.
The Real Bear Case
Three risks worth taking seriously:
The DOJ referral is not a soft warning. The FDA referred Hims specifically to the Department of Justice over the $49/month semaglutide pill. Novo Nordisk has an active patent lawsuit. These aren’t regulatory letters — they’re enforcement actions. The outcome could include fines, an injunction against compounded GLP-1 sales, or both. The company says it doesn’t know what actions will be taken. That’s honest and also unsettling.
Margin compression is structural, not temporary. Gross margins fell from 79% in FY2024 to 74% in FY2025 and are heading toward 72% in Q1 2026. Product costs rising 30%+ while EBITDA guidance misses estimates suggests the compounding business is becoming more expensive to operate just as it’s coming under regulatory fire. That’s a bad combination.
The Eucalyptus timing is risky. Announcing a $1.15 billion international acquisition in the middle of a domestic regulatory crisis is aggressive. HIMS will likely need to raise equity or take on debt, which dilutes existing shareholders. Integrating a multi-country business while managing a DOJ review is a lot to execute simultaneously.
The Verdict
Hims & Hers is not a distressed company. $2.35 billion in revenue, $300 million in operating cash flow, 2.5 million subscribers, and a profitable core business in hair, skin, and mental health — that doesn’t go away if compounded semaglutide does. Dudum isn’t wrong that the business has durable value outside GLP-1s.
But the current $15.37 stock price (market cap: $3.52 billion, P/E: 30x) reflects the market pricing in a meaningful probability that the compounding business gets materially restricted. At $15, you’re essentially buying the non-GLP-1 business at roughly 1.5x 2025 revenue and getting a free option on regulatory survival. That’s not crazy.
The binary nature of the regulatory risk is what makes this hard. It’s not a question of “will revenue grow 20% or 30%?” — it’s “will this product line exist in 12 months?” That kind of uncertainty doesn’t reward a large position.
Buy range: $13–15, small position only. The Q1 2026 earnings call is the one to watch — any update on the DOJ situation or FDA enforcement changes the entire picture. If regulatory pressure eases and personalized compounding continues, the stock has a clear path to $30+. If enforcement broadens, $10 is not out of the question.
Watch the Q1 earnings call before adding. It’s the most important data point this stock has in 2026.
Disclaimer: This is not financial advice. The author holds no position in HIMS stock. Always do your own research before making investment decisions.