Should You Trim Or Add To Your Hims & Hers Position Now? Trefis Team Mon, October 12, 2026 at 6:53 PM EDT 4 min read HIMS -0.91% ^GSPC -0.06% ADUS +1.00% CVS +1.83% CI +0.32% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Investors holding Hims & Hers Health (HIMS) face a stark contradiction. The stock has lost 52% in twelve months, while the S&P 500 returned 17.0%. Following that decline, shares now trade at 2.8 times sales, against 3.1 for the index. Yet the company grew sales nearly 40% in fiscal Q2 2026. So where is that growth coming from?
Hims & Hers Has Two New Sources Of Growth
Two major initiatives in 2026 helped drive the recent expansion. In March, Hims & Hers widened the range of branded weight loss products it sells. Management called this expanded lineup a key driver of the quarter's faster growth. In June, the company closed its purchase of Eucalyptus. This transaction stands as the largest acquisition in its history, and Eucalyptus contributed about $40 million of revenue in the quarter. At the same time, international revenue rose more than 17-fold from a year earlier to $131 million. U.S. revenue remains the larger part of the business at $622 million, but it grew 16%, well short of the company's nearly 40% overall pace.
Rapid expansion is a familiar pattern for the company. Over a three-year span, Hims & Hers has grown sales by an average of 55.6% a year, outpacing the 5.9% average for the S&P 500. The business ended the quarter with nearly 3 million subscribers, and buyers of the stock may be betting on that sustained record of sales growth.
Is Hims & Hers Giving Up Profit To Grow?
For now, the answer is yes. Gross margin fell to 64% in the quarter, down about 6 points from the quarter before on an adjusted basis. Management tied this drop to a shifting sales mix, noting that branded weight loss products and international sales are becoming a larger part of the business. The company expects the lower margin to last through the second half of 2026.
Hims & Hers also reported a net loss of $86 million for the quarter, and its adjusted results left out about $81 million of one-time costs. Cash exited the business as well. Operating cash flow was negative $36 million, which management put down to the cash tied up in its fast-growing branded weight loss business.
Where Does The Hims & Hers FTC Case Stand?
Regulatory scrutiny adds another hurdle. Hims & Hers faces a complaint the FTC filed on July 29, following several months of settlement talks. Management addressed the litigation on the August 10 call, stating the company is confident in its position and intends to defend it vigorously. Stemming from the complaint, the company and some of its executives now also face a securities class action.
The ultimate cost of the case is still open, but the financial impact is already appearing in the accounts. The one-time costs in the second quarter included amounts set aside for the FTC litigation. Against that open cost, Hims & Hers ended that quarter with more than $840 million of cash and short-term investments.
When Markets Slide, Hims & Hers Stock Slides Further
Broader market volatility has historically punished the stock. In the 2025 tariff shock, the stock fell 63%, against 19% for the S&P 500. A similar pattern emerged during the 2022 inflation shock, when shares fell 54%, against 24% for the index. Both times the stock fell more than twice as far as the index.
Steep falls may be easier to hold through when a company is bringing in cash. Hims & Hers reports next on its third quarter. Management guided for revenue of $880 million to $900 million in that quarter, against more than $753 million in the second. If operating cash flow climbs back above zero in that report, it would show Hims & Hers paying for its weight loss expansion out of its own sales.
Now you know HIMS better. And that's our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.
There is a smarter choice. Since its inception, the Trefis High Quality (HQ) Portfolio has beaten the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking.
