Hims & Hers Charts Aggressive Growth Path Amid Share Price Weakness

Despite trading significantly below its yearly highs, the telemedicine provider Hims & Hers Health is shifting into an offensive growth strategy. The company is pursuing two simultaneous acquisitions to accelerate its international footprint and broaden its technological capabilities. This aggressive move comes as investors question whether such expansion can alleviate the recent market skepticism weighing on the stock.

Operational results tell a story of robust growth, which contrasts with the stock's performance. For the third quarter, revenue surged 49% to $599 million. Adjusted EBITDA showed even stronger momentum, climbing 53% to over $78 million. However, profitability metrics have introduced a note of caution for some market participants. The gross margin contracted from 79% to 74%, sparking investor concerns.

This margin pressure, coupled with regulatory uncertainties surrounding GLP-1 medications, has dampened sentiment. Shares recently traded at 33.61 euros, marking a decline of approximately 49% from the 52-week high reached in February. Market observers interpret this as a broad reassessment of the company's risk profile, even though management has provided more precise full-year guidance.

A Two-Pronged Acquisition Strategy

Responding to market conditions with strategic ambition rather than retreat, Hims & Hers has launched a dual acquisition plan. The purchase of Livewell, a digital platform focused on weight loss, facilitates an official market entry into Canada. This move establishes Canada as the company's third major international market following the United States and Europe. The timing is strategic, aiming to capitalize on the anticipated availability of generic semaglutide formulations in Canada by 2026.

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

Concurrently, the company is bolstering its technology base through the acquisition of YourBio Health. This U.S.-based firm specializes in capillary blood collection via a proprietary microneedle system designed for a nearly painless experience. While the Livewell deal is effective immediately, the YourBio transaction is slated for completion in early 2026.

Wall Street Sentiment and Corporate Countermeasures

Analyst opinions on the stock's trajectory are divided. Some market experts urge caution, citing the recent share price decline and a lofty valuation—the price-to-earnings ratio stands near 70. Others view current price levels as a potential entry point for investors. The average price target of $44 suggests upside potential, yet the range of estimates remains exceptionally wide.

On the corporate front, management is taking action to instill confidence. A share repurchase program authorized for $250 million is intended to provide support for the equity. Furthermore, the company has appointed Deb Autor, a former senior official at the U.S. Food and Drug Administration (FDA), as Chief Policy Officer. This hire is designed to better navigate the complex regulatory landscape. Ultimately, the successful integration of the new technologies and the expansion into the Canadian market will be pivotal in determining if the stock can establish a durable foundation for recovery.