Hims & Hers Health Stock Plunges 57%: Is the Telehealth Pioneer Now a Value Play?
Hims & Hers Health (NYSE: HIMS), the telehealth platform known for democratizing access to care for sensitive issues like hair loss and sexual wellness, finds its stock in a painful correction. After a precipitous 57.1% drop over six months, shares now hover around $27.15, leaving shareholders reeling and the market questioning the company's path to sustainable profitability.
The company's core growth metrics, however, tell a more resilient story. In its latest quarter, Hims & Hers reported a robust subscriber base of 2.47 million, reflecting a nearly 39% average annual growth rate over two years. This "land and expand" model—acquiring customers for initial treatments and subsequently cross-selling additional wellness products—has fueled impressive top-line expansion. Yet, the critical challenge has been translating this rapid growth into bottom-line results.
"The market's patience for 'growth at all costs' has evaporated," said Michael Thorne, a portfolio manager at Veritas Capital Insights. "While Hims & Hers has successfully scaled its customer base, investors are now laser-focused on capital efficiency and a clear roadmap to profitability. The recent ROIC improvement is a step in the right direction, but it's emerging from a deeply negative baseline."
Indeed, the company's four-year average Return on Invested Capital (ROIC) sits at -4%, a stark reminder of the heavy investments required to build its digital footprint. Recent quarters show a positive trend in ROIC, suggesting better operational leverage, but skepticism remains high.
At a forward P/E ratio of approximately 30x, the valuation debate is intense. Bulls argue the sell-off is overdone, pricing in excessive pessimism for a company with a strong brand and a recurring revenue model. Bears counter that in a higher interest rate environment, unprofitable growth stories are being rightfully re-rated.
Market Voices:
"This is a classic case of a great product meeting harsh financial realities," commented David Chen, a healthcare analyst at Finley Research. "The customer growth is undeniable, and their model addresses a genuine need. If management can demonstrate consistent margin improvement in the next two quarters, the current price could look like a steal."
"It's a falling knife, plain and simple," argued Sarah J. Miller, an independent investor and vocal critic on financial forums. "A 57% crash isn't an 'opportunity'; it's a verdict. The COVID-era boom masked fundamental issues with unit economics. Until they prove they can actually make money from those millions of subscribers, I'm staying far away."
"I've been a customer for two years and the service is seamless," shared Alex Rivera, a small business owner from Austin. "As an investor, the volatility is nerve-wracking, but I'm holding. The convenience they offer is the future of routine healthcare, and I believe the market will eventually recognize that."
"The concentration risk in the broader market makes overlooked sectors like digital health intriguing," noted Priya Sharma, a strategist at Oakwood Advisors. "While the Magnificent Seven dominate headlines, disciplined stock-picking in beaten-down names with solid user bases, like HIMS, could yield asymmetric returns. The key is timing and confirmed execution."
The coming quarters will be pivotal for Hims & Hers. The company must convince Wall Street that its story is evolving from one of pure subscriber acquisition to one of profitable scale, all while navigating an increasingly competitive telehealth landscape and tighter consumer budgets.