Hims & Hers, a telehealth company, experienced a significant decline in its stock price, dropping 15.5% in premarket trading following the release of its first-quarter earnings report. The company reported a net loss of $92 million for the quarter, an increase from a loss of approximately $50 million in the same period last year.
Additionally, its adjusted EBITDA fell to $44 million from $91 million year-over-year, despite a 4% increase in revenue to $608 million. The average monthly revenue per subscriber decreased to $80 from $85.
Looking ahead, Hims & Hers anticipates second-quarter revenue between $680 million and $700 million and projects full-year revenue of up to $3 billion, with adjusted EBITDA forecasts of up to $55 million for the second quarter and up to $350 million for the year. Analysts from Citi characterized the company's guidance as "mixed," noting that the second-quarter outlook was below their estimates.
They highlighted that the first quarter represents a transition phase for Hims & Hers as it shifts away from its reliance on compounded GLP-1 weight loss drugs. This shift follows a deal with Novo Nordisk in March, allowing Hims to sell the GLP-1 drug Wegovy while ceasing the advertisement of cheaper copycat versions, which had drawn legal scrutiny from Novo.
The controversy surrounding Hims' sale of these copycat drugs, which were marketed under a regulatory loophole, has previously impacted the company's stock performance, particularly given the profitability of its weight loss drug sales.
Novo Nordisk had previously accused Hims of illegal mass compounding that jeopardized patient safety, leading to a swift withdrawal of the copycat products after public backlash. The ongoing challenges and regulatory issues surrounding Hims' product offerings continue to influence investor sentiment and stock performance