Hims & Hers Expands Care Model Amid Strong Growth but High Valuation Concerns

What happened

Hims & Hers announced an acceleration of its clinician-led platform with new diagnostics, hormonal health services, and at-home testosterone treatments, building on its strategy to diversify beyond core categories. This expansion aligns with the company's existing focus on lab-enabled personalization and vertical integration, as highlighted in recent filings. Hims has demonstrated robust execution, with over 2.4 million subscribers growing 31% year-over-year and profitability in the first half of 2025. However, the stock's rich valuation at approximately 109 times trailing earnings and free cash flow volatility amid growth investments remain significant headwinds. While this move could enhance subscriber retention and cross-selling, it does not immediately mitigate risks from GLP-1 policy shifts or justify the elevated multiples.

Implication

The acceleration into diagnostics and hormonal health may support subscriber growth and average revenue per user by offering more integrated care options. This diversification could help offset potential declines in GLP-1-related revenues if regulatory pressures intensify. However, success hinges on effective execution and adoption, which carries inherent risks in a competitive telehealth landscape. Given the stock's premium valuation, any stumbles in rolling out new services could amplify downside volatility. Ultimately, while the news reinforces Hims' growth narrative, it does not alter the need for patience until sustained free cash flow and guidance delivery are demonstrated.

Thesis delta

The announcement confirms Hims' ongoing diversification efforts but does not shift the core investment thesis, as key concerns around valuation and regulatory risks persist. It underscores the company's execution in expanding services, yet the hold stance remains warranted until evidence of improved free cash flow and resilience to GLP-1 headwinds emerges.