Growth Versus Profitability: The Hims & Hers Conundrum

The latest financial results from telehealth provider Hims & Hers present investors with a complex puzzle. While the company demonstrates remarkable revenue expansion, this growth comes at a significant cost to its bottom line, creating a stark contrast between top-line performance and profitability.

Hims & Hers continues to attract subscribers at an impressive rate, with its customer base growing 21% to surpass 2.5 million users. This subscriber surge helped drive a substantial 49% revenue increase that exceeded market expectations. The digital channel proved particularly strong, recording growth exceeding 50%.

However, this celebratory revenue story has a troubling counterpart. The company's earnings per share experienced a dramatic 81% decline, creating what analysts see as a fundamental tension between expansion and financial sustainability. The critical question for shareholders is whether current growth initiatives are undermining the company's path to consistent profitability.

Strategic Expansion and Its Financial Implications

Management continues to pursue an aggressive growth strategy across multiple fronts. The company launched a new women's health division in October, followed by offerings addressing low testosterone in men. Perhaps most significantly, Hims & Hers is in discussions with Novo Nordisk regarding potential distribution of the weight loss medication Wegovy—a partnership that could substantially impact future growth trajectories.

Should investors sell immediately? Or is it worth buying Hims & Hers?

These expansion efforts appear to be pressuring the company's margins. Market observers note that while customer numbers continue to climb, the revenue generated per customer has been declining. This dynamic has contributed to volatile stock performance as investors weigh the company's strategic direction against its financial metrics.

The Path to Sustainable Profitability

Looking ahead, Hims & Hers forecasts continued robust revenue growth between 26% and 30% for the fourth quarter. The company's full-year 2025 projections suggest even stronger expansion potential, with growth potentially reaching 58%.

Yet the central challenge remains clear: converting this impressive top-line growth into sustainable profitability. The coming quarterly reports will be closely scrutinized for evidence that the company can reverse its margin trends. Until then, the investment thesis for Hims & Hers remains focused on timing—specifically, when the company's profit curve will finally reflect its substantial revenue achievements.