Hims & Hers Expands Weight-Loss Program to UK, But Overvaluation and Regulatory Risks Loom Large

What happened

Hims & Hers has expanded its weight-management program to the United Kingdom, leveraging its digital platform to offer personalized obesity treatments. This move builds on its existing U.K. presence via the Zava acquisition and aligns with its strategy for international growth. However, the company's weight-loss offerings, which include GLP-1 therapies, face heightened regulatory scrutiny and have been compressing gross margins, as noted in recent filings. The expansion comes amid a stock price that trades at a 53% premium to the DCF-based intrinsic value of $24 per share, with lofty P/E and EV/EBITDA multiples. While this could boost revenue, it does little to address the core issues of overvaluation and potential regulatory headwinds.

Implication

The U.K. expansion could increase Hims' subscriber base and revenue diversification in a new market, supporting top-line growth. However, it introduces additional regulatory complexity, as U.K. healthcare rules may mirror U.S. challenges, particularly for GLP-1 weight-loss products that are margin-dilutive. This move might exacerbate profitability pressures, with gross margins already declining from 79% in 2024 to 74% in Q3 2025. Given the stock's high valuation multiples—62x P/E and 112x EV/EBITDA—the growth potential is likely already priced in, offering minimal margin of safety. Investors should monitor execution for signs of margin stabilization or regulatory de-risking, but the current setup favors a patient stance over new capital deployment.

Thesis delta

The DeepValue master report's 'WAIT' thesis is not materially altered by this news, as expansion to the U.K. adds a growth lever but does not mitigate key risks like GLP-1 regulatory exposure or high marketing costs. It reinforces the need for disciplined valuation, as the stock remains significantly overvalued relative to fundamentals. Therefore, the stance remains unchanged, emphasizing patience until clearer evidence of margin recovery or a price pullback emerges.