Needham has maintained a Hold rating on Hims & Hers (HIMS) as the telehealth and consumer health company contends with regulatory and legal questions surrounding its weight-loss medication program.
Shares of Hims & Hers have been volatile, falling nearly 13% over the past week and more than 55% over the last six months. The company recently paused sales of a newly introduced compounded semaglutide oral pill following scrutiny from the U.S. Food and Drug Administration, an action that prompted the Department of Health and Human Services to refer the matter to the Department of Justice for a potential investigation into violations.
Needham said the company's decision to halt the oral GLP-1 offering followed what were described as "constructive conversations with industry stakeholders," but the firm noted it is still unclear whether the legal and regulatory issues have been fully resolved. The uncertainty surrounding the semaglutide program has altered growth expectations for the business, according to Needham.
Ryan MacDonald, a Needham analyst, highlighted the commercial implications of the pause, saying that the absence of an oral GLP-1 product removes "a much-needed growth driver" for the company. MacDonald contrasted that gap with the company’s prior marketing successes, including its high-profile consumer campaigns during the 2025 Super Bowl.
Despite the regulatory headwinds, the firm’s recent operating results remain notable: Hims & Hers achieved 78% revenue growth over the last twelve months and is expected to remain profitable this year. However, Needham warned that continued agency pursuit could imperil the company’s "multi-hundred million dollar injectibles revenue stream at risk," a point that underlies the investment firm’s decision to "remain on the sidelines given the heightened level of uncertainty."
Market valuation metrics for HIMS reflect a premium despite current volatility. The stock trades at a price-to-earnings ratio of 42.7 and carries elevated EBITDA valuation multiples, figures that Needham flagged as important context for investors assessing risk versus reward. The company is scheduled to report earnings in 14 days, an event that may provide management an opportunity to address regulatory and commercial questions.
In related corporate updates, Hims & Hers announced the formal discontinuation of its compounded semaglutide pill program, which had been launched as a weight-loss treatment priced at $49 per month. The firm said that decision followed stakeholder discussions and a warning from regulators about potential enforcement actions against non-FDA-approved GLP-1 products. The U.S. regulator’s announcement about restricting GLP-1 active pharmaceutical ingredients played a direct role in shaping analyst reactions and corporate choices.
Analyst coverage remains mixed. BTIG has maintained a Buy rating on the shares. Morgan Stanley continues to carry an Equalweight rating with a $40.00 price target. Bank of America Securities lowered its price target from $26.00 to $21.00 while keeping an Underperform rating. These divergent views underline the market's split interpretation of Hims & Hers’ prospects amid regulatory uncertainty.
Beyond the GLP-1 developments, the company has advanced other product initiatives. Hims & Hers launched a multi-cancer screening blood test developed by GRAIL, Inc., intended to detect signals for more than 50 cancer types before symptoms appear, including cancers that often lack recommended population screenings such as pancreatic and ovarian cancers. These product moves illustrate a strategic shift as the company balances new offerings against heightened regulatory focus in its weight-loss portfolio.
What to watch next
- Upcoming earnings report in 14 days, when management may discuss regulatory developments and revenue trends.
- Any formal updates from regulatory authorities or the Department of Justice regarding the semaglutide program or related enforcement activity.
- Analyst revisions and market reaction to further details on injectibles and other revenue streams.