Regulatory Headwinds Challenge Hims & Hers’ Growth Trajectory

Shares of the telemedicine provider Hims & Hers faced significant pressure following new legislative developments in Washington. The stock declined approximately 5%, trading near $38, as investors assessed the potential impact of a proposed bill on a key segment of the company's business.

The immediate catalyst for the sell-off was the introduction of the "SAFE Drugs Act of 2025" by U.S. Representatives Rudy Yakym and André Carson on December 10. This draft legislation seeks to impose substantial new restrictions on the ability of pharmacies to compound copycat versions of GLP-1 medications.

This regulatory move strikes at the core of a profitable business line for Hims & Hers. The company currently offers compounded semaglutid in the United States, the same active ingredient found in the blockbuster weight-loss drugs Wegovy and Ozempic. Analysts at Citi promptly cautioned that the proposed rules could "significantly restrict" the production avenues for these treatments, which have recently been a major revenue driver for the firm.

Counterbalance: A Strategic UK Launch

Amidst this domestic regulatory uncertainty, Hims & Hers is pushing forward with its international expansion strategy. Also on December 10, the company launched a comprehensive weight management program in the United Kingdom. Its approach in this new market differs from its U.S. model; instead of compounded drugs, the UK offering is built around branded medications from Eli Lilly (Mounjaro) and Novo Nordisk (Wegovy), supplemented by oral preparations like Orlos.

The British market presents a substantial opportunity, with 64 percent of the adult population classified as overweight or obese. This geographic diversification is viewed as a strategic step to reduce the company's overall reliance on the U.S. regulatory landscape.

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

Financial Performance and Capital Allocation

The company's underlying operational metrics remain strong. Third-quarter revenue surged 49.2 percent to nearly $599 million. However, earnings per share of $0.06 fell short of the $0.09 consensus estimate among analysts. Demonstrating confidence in its financial position, the board of directors authorized a new $250 million share repurchase program, equivalent to roughly 3 percent of outstanding shares.

Divergent Signals from the Street and Insiders

Market analysts are presenting a mixed picture. Barclays initiated coverage on December 10 with an "Overweight" rating, focusing on the firm's long-term growth potential beyond near-term regulatory risks.

Conversely, insider trading activity shows a pattern of selling. Director Andrea G. Perez Garcia disposed of 2,500 shares on December 9 at an average price of $39.17, realizing nearly $98,000. Chief Executive Officer Andrew Dudum has also notably reduced his stake over recent months.

Outlook: Growth Versus Regulation

While Hims & Hers continues to post impressive top-line growth, the shadow of regulatory intervention now looms large. The critical question for investors is whether the company's international initiatives can scale rapidly enough to offset any potential headwinds in its core U.S. market. The coming quarters will reveal the balance between these accelerating growth drivers and emerging regulatory pressures.