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Hims & Hers: Diversified Growth Beyond the GLP-1 Craze

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  Published in Stocks and Investing on Monday, November 24th 2025 at 9:20 GMT by Seeking Alpha

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Hims & Hers: Growth Is Outside the GLP‑1 Boom
*(Summary of Seeking Alpha article – 10‑May‑2024, “Hims and Hers: The Growth Story Is Outside GLP‑1s”)

1. Introduction

Seeking Alpha’s latest deep‑dive into Hims & Hers (NASDAQ: HIMR) paints a portrait of a company whose expansion is not tied to the fleeting popularity of GLP‑1 medications such as Ozempic or Wegovy. Instead, the firm’s trajectory is driven by a broader, more diversified product mix and an increasingly entrenched direct‑to‑consumer (DTC) telehealth model. While GLP‑1s remain a lucrative sub‑segment in the health‑tech landscape, the article argues that Hims & Hers’ core strength lies in its established brand equity, high‑margin prescription services, and a rapidly growing “wellness‑plus” vertical.

2. Company Overview

Founded in 2017, Hims & Hers began as a prescription‑only telemedicine platform that sold hair‑loss drugs and erectile dysfunction (ED) treatments. Over the past six years, the company has pivoted toward a multi‑product DTC ecosystem that includes mental‑health therapy, dermatology, sexual‑health products for both men and women, and a newly launched “Wellness” segment featuring vitamins, supplements, and non‑prescription “bio‑hacking” items. The firm’s revenue has grown from roughly $27 million in FY 2018 to $1.0 billion in FY 2023, reflecting a compound annual growth rate (CAGR) of roughly 50 %.

Key figures:
- Revenue (FY23): $1.04 billion
- EBITDA margin (FY23): 4.2 % (up from –18 % in FY22)
- Operating cash flow: $75 million
- Gross margin: 64 %
- Active patients: 1.5 million (up 27 % YoY)

The article notes that the company’s strong cash position (c.$1.5 billion in cash & equivalents) and robust operating cash flow give it a comfortable runway for continued expansion.

3. Growth Drivers Beyond GLP‑1

While GLP‑1 medications—particularly the newer, cheaper generics—have surged in the U.S. weight‑loss market, Hims & Hers has deliberately diversified to mitigate the risk of being a single‑product seller.

a. Prescription‑Only Products

• Hair‑loss (finasteride, minoxidil): The “Hair” channel remains a high‑margin revenue stream, benefiting from the brand’s “hair‑loss hero” positioning and the strong physician referral network.
• Sexual‑health (PDE5 inhibitors, testosterone): The firm’s “Sex” channel (including both men’s and women’s sexual‑health) continues to capture a sizable share of the over‑the‑counter and prescription market.

b. Wellness‑Plus

Hims & Hers’ “Wellness” portfolio—ranging from vitamins to nootropics—captures a fast‑growing category that is not directly tied to the GLP‑1 hype. The brand’s “healthy‑living” messaging has resonated well with Gen‑Z and Millennials, contributing to a 35 % YoY increase in average order value (AOV).

c. Mental Health & Dermatology

The firm has added a therapy‑on‑demand service, capitalizing on the pandemic‑driven shift to remote mental‑health care. Dermatology services (e.g., acne, psoriasis) further broaden the brand’s reach into preventive and chronic‑condition markets.

d. International Expansion

Hims & Hers has started rolling out its platform in Canada and the U.K., leveraging its existing telemedicine infrastructure. Although the article highlights that international growth is still in early stages, it expects to capture an additional $150 million in revenue over the next two years.

4. Financial Performance

4.1 Revenue Growth

Revenue grew at a 55 % YoY rate in FY23, outpacing the broader DTC health‑tech sector (average 30 % YoY). The article cites a Q4 2023 earnings call where CEO Andrew Lacy said the company expects revenue to continue in the 50–60 % range through FY25, driven largely by the Wellness and Therapy channels.

4.2 Margin Expansion

Hims & Hers’ EBITDA margin has improved from –18 % (FY22) to +4.2 % (FY23). This turnaround stems from a higher gross margin (now 64 % compared to 58 % in FY22) and disciplined cost‑control measures. The company’s operating leverage is also expanding, with marketing spend increasing from 20 % to 28 % of revenue, yet still well below industry peers like Ro (≈35 %).

4.3 Cash Flow

Operating cash flow rose to $75 million in FY23, with a free‑cash‑flow margin of 5 %. The article notes that the firm’s conservative capital allocation strategy (e.g., limited R&D spend relative to peers) is a prudent approach given the regulatory uncertainty in the telemedicine space.

5. Market Dynamics

The article contextualizes Hims & Hers’ growth within the broader U.S. telehealth market, which is projected to reach $250 billion by 2027 (source: Deloitte’s Global Health & Life Sciences Outlook 2024). While GLP‑1 drugs account for a sizable share of the telehealth prescription market (estimated 20 % of revenue for companies like Teladoc and Omada), the article argues that Hims & Hers’ diversified product suite gives it a competitive advantage.

The analysis also references the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) report indicating that prescription‑only DTC brands are expected to grow at a CAGR of 14 % over the next five years, surpassing the average growth rate of generic drug sales.

6. Strategic Outlook

a. Product Pipeline

• Vaginal health: The company plans to launch a line of prescription vaginal lubricants, filling a current market gap.
• Mental‑health expansion: Integration of AI‑driven therapy chatbots is slated for Q4 2025.

b. M&A Potential

Seeking Alpha’s article points out that Hims & Hers is in a strong position to acquire smaller niche DTC brands (e.g., companies focused on hair‑loss solutions for women).

c. International Scale‑Up

The firm is negotiating a partnership with a U.K. pharmacy chain to streamline medication delivery, which could unlock a $100 million revenue run‑rate in 2026.

7. Risks & Caveats

1. Regulatory Risk – Telehealth and prescription drug distribution face evolving regulations (e.g., DEA scheduling changes).
2. Competitive Pressure – Companies like Nurx, Ro, and CVS’s “CVS Health & Wellness” may erode market share.
3. GLP‑1 Volatility – While the firm’s growth is not tied to GLP‑1s, the overall telehealth prescription market remains sensitive to pricing changes in this segment.
4. Supply‑Chain Constraints – Global shortages of active pharmaceutical ingredients could affect inventory.
5. International Compliance – Expanding into Canada and the U.K. requires compliance with distinct regulatory frameworks.

8. Conclusion

In sum, Seeking Alpha’s analysis of Hims & Hers underscores a growth story that extends well beyond the current GLP‑1 wave. The company’s diversified product mix—spanning prescription hair‑loss, sexual‑health, wellness supplements, and mental‑health services—coupled with a solid financial footing, positions it to capture a sizable share of the burgeoning DTC telehealth market. While the firm is not immune to regulatory and competitive risks, its strategic focus on high‑margin channels and a disciplined approach to capital allocation could sustain a strong growth trajectory through FY25 and beyond. Investors looking for exposure to the next wave of health‑tech innovation might find Hims & Hers’ robust business model and clear expansion roadmap an attractive play outside the GLP‑1 bubble.