Hims & Hers' stock jumps on hopes of a first profitable year, as it floats opportunities in weight loss

By Bill Peters

'There are still so many barriers for why people are not getting treated,' telehealth company's CEO says

Shares of Hims & Hers Health Inc. rallied after hours on Monday, after the online wellness platform said 2024 would be its first year of positive net income and forecast first-quarter and full-year sales that were above expectations.

That forecast came after the telehealth company - which offers health consultations and sells hair-loss, weight-loss and anxiety treatments, as well as sexual-health drugs like Viagra, through its Hims and Hers websites - reported its first-ever quarter of positive net income.

Hims & Hers shares (HIMS) jumped 18.4% after hours.

The gains come as the company tries to expand its offerings beyond generic medications and provide more personalized treatments, such as different forms and dosages.

"There are still so many barriers for why people are not getting treated - whether or not that's access, or price, or stigma, or education, or a lack of personalized choice," Chief Executive Andrew Dudum said on the company's earnings call Monday.

Executives at Hims & Hers also said the company is in the early stages of offering weight-loss drugs, but added that they believe it could become a one-stop shop for other aspects of managing obesity.

Hims & Hers said it expects first-quarter sales of $267 million to $272 million, above FactSet analyst forecasts for $253.3 million. It anticipates full-year revenue of $1.17 billion to $1.2 billion, above analyst estimates for $1.11 billion.

For its fourth quarter, the company reported net income of $1.25 million, or 1 cent a share, contrasting with a loss of $10.9 million, or 5 cents a share, in the year-prior quarter. Revenue in the quarter jumped 47% year over year to $246.6 million, while subscribers jumped 48% to 1.5 million.

Analysts polled by FactSet expected Hims & Hers to lose 2 cents a share, on revenue of $246.5 million.

The company is among those that have benefited from the rise of telehealth since the pandemic, as well as the popularity of GLP-1 drugs like Wegovy and Ozempic that can help reduce a person's appetite and lead to weight loss. More health and pharma companies have tried to find a way to get in on the potential gains.

Weight-loss platform WW International Inc. (WW), better known as Weight Watchers, over the past year has bought a telehealth provider that prescribes such drugs and launched a new program geared toward people using them. However, WW shares fell last month after Eli Lilly & Co. (LLY) launched its own platform offering telehealth services and home delivery of certain drugs, including one made to fight obesity.

During Hims & Hers' earnings call, an analyst asked for executives' thoughts on what new products the company could bring in, as it starts to work with people using GLP-1 drugs that might lead to less eating and, in turn, nutritional deficiencies.

Dudum said he could see Hims & Hers offering food replacements and other supplements, alongside its weight-loss offerings.

"This category is one where you really need all hands on deck, and there's often five or six components that really makes that puzzle come together and be successful," he said.

Elsewhere in telehealth, executives at Teladoc Health Inc. (TDOC), known for its BetterHelp therapy app, said last week that results from its social-media marketing spending had flagged, and warned that most U.S. healthcare consumers already have access to virtual care.

Hims & Hers Chief Financial Officer Yemi Okupe said on Monday's call that having a broader assortment of products helps make the task of attracting users easier.

"We're constantly experimenting with new messages, new narratives to consumers, and really the channels interconnect with one another," he said.

-Bill Peters

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02-26-24 1952ET

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