Hims & Hers Shares Drop 10% After Revenue Miss: What Investors Need to Know

Shares of Hims & Hers Health dropped 9% after the company revealed second-quarter results that fell short of Wall Street’s predictions. Analysts expected higher revenue, but the company reported $544.8 million, below the $552 million forecast.

Here’s a brief overview based on analysts’ estimates:

• Earnings per share: Adjusted at 17 cents, slightly above the expected 15 cents.
• Revenue: Up 73% compared to last year’s $315.6 million, with a net income of $42.5 million.

Looking ahead, Hims & Hers projects third-quarter revenue between $570 million and $590 million, but analysts had expected $583 million. The company anticipates adjusted EBITDA of $60 million to $70 million, which is lower than the $77.1 million analysts estimated.

Controversy Over Compounded Drugs

Recently, Hims & Hers has been in the spotlight due to its sale of compounded GLP-1s, cheaper versions of popular diabetes and weight loss medications. While compounded drugs are legal in specific cases, the FDA indicated supply issues had been resolved, raising questions about the necessity of these alternatives.

In June, shares saw a significant drop after a partnership with Novo Nordisk fell through. The drugmaker claimed Hims & Hers did not comply with laws regarding the mass sale of compounded drugs.

Despite these challenges, the company reported an adjusted EBITDA of $82 million in the second quarter, outpacing last year’s $39.3 million and analysts’ expectations of $73 million.

Recent Insights

As the telehealth industry continues to develop, it’s notable that about 40% of Americans have used virtual health services in the past year, according to a recent survey by McKinsey. This highlights a growing trend and shift in healthcare delivery, with increased acceptance of online consultations and services.

Future regulations may impact how companies like Hims & Hers operate, particularly in drug sales. Keeping an eye on these changes will be essential as the landscape evolves.

For more detailed insights on compounded drugs and FDA regulations, you can visit the FDA’s official page.

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