Hims stock reversed lower Tuesday despite beating third-quarter expectations on the back of Hims & Hers Health's "robust" weight-loss trajectory.
The online pharmacy is well-known for its compounded version of Novo Nordisk's semaglutide. Novo sells semaglutide as a weight-loss drug called Wegovy. But while it exists on the Food and Drug Administration's drug shortage list, compounding pharmacies like Hims & Hers can step in to help fill the gap.
During the three months ended Sept. 30, Hims & Hers earned an adjusted 32 cents per share on $401.6 million in sales. Earnings flipped from a year-earlier loss of 4 cents and crushed expectations for a 13-cent gain. Sales rocketed 77% year over year and topped calls for $382 million, according to FactSet.
"Our model is rapidly gaining scale, driving accelerating top line growth, improving profitability and strong cash flow," Chief Financial Officer Yemi Okupe said in a statement. "We are seeing this strength across our business. Our new weight-loss offering is helping a growing number of people and providing an accelerant to what was already a robust trajectory."
Hims stock closed down a fraction at 20.64 on Tuesday, erasing a strong post-market gain after the company issued its third-quarter report late Monday. Shares are forming a cup-with-handle base with a buy point at 23.74, MarketSurge chart analysis shows. Hims stock ranks second on the IBD 50 list of elite growth stocks.
Hims Stock: Raised Outlook For The Year
Notably, during the September quarter, Hims & Hers topped 2 million subscribers. More than half of them are using a personalized solution. That's up 175% year over year, the company said in an email to Investor's Business Daily.
That's one of the benefits of compounding medications, says Matt Montes de Oca, chief clinical officer for Strive Pharmacy. Strive is another compounding pharmacy. Sometimes, patients can't tolerate the dosage that comes in the autoinjector or pen included with the branded medication.
Compounded drugs "offer the ability to step outside the titration scheduled by these pens," he told IBD in an interview.
This is key for drugs that mimic the GLP-1 hormone, like Novo's semaglutide. And Hims & Hers is also leaning on this strategy. The company noted in a recent survey of 920 customers, 90% of customers were satisfied with their personalized dosing regimen and 87% were progressing toward or had already met their weight-loss goal.
Hims & Hers raised its guide for the year, and now calls for $1.46 billion to $1.465 billion in sales. Three months ago, the company guided to a lower $1.37 billion to $1.4 billion in sales this year.
Analysts called for the company to notch its first year of profitability with earnings of 59 cents a share and nearly $1.4 billion in sales.
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