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Just For You
The Silver Lining of Last Week's Hims & Hers Earnings MissAuthored by Jessica Mitacek. Article Published: 5/21/2026. 
Key Points
- Hims & Hers Health experienced a massive 1,200% bottom-line miss in Q1 2026, reporting EPS of negative 44 cents and missing revenue estimates, which sent the stock plummeting nearly 23%.
- Despite the sell-off, the long-term outlook remains strong, driven by double-digit growth forecasts across its five core segments and the pending acquisition of Australian digital healthcare platform Eucalyptus.
- Revenue is expected to accelerate starting in Q2, driven by a weight-loss partnership with Novo Nordisk that has prompted management to raise its full-year guidance.
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When Hims & Hers Health (NYSE: HIMS) reported Q1 FY2026 earnings on May 11, shareholders were dismayed by the size of the double miss. The telehealth platform reported earnings per share (EPS) of negative 44 cents, versus analyst expectations of four cents, and quarterly revenue of just over $608 million fell far short of the nearly $617 million consensus.
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While that revenue figure failed to impress investors, it was the EPS miss that caught the market off guard, coming in more than 1,000% below expectations and sending the stock sharply lower. Since its Q1 earnings call, the stock has plunged nearly 23%. For buy-and-hold investors, however, the long-term investment thesis remains intact. The company operates at the intersection of several high-growth markets that support its international expansion efforts, it continues to deliver strong revenue growth, and its GLP-1 strategic partnership with Danish multinational pharmaceutical company Novo Nordisk (NYSE: NVO)—maker of semaglutide weight-loss drugs Wegovy and Ozempic—should begin to bear fruit as soon as the second quarter. Global Demand Bodes Well for International ExpansionHims & Hers operates in five principal segments: sexual health, hair care, dermatology, mental health, and weight loss. All five businesses fall under telehealth, a global market that is forecast to grow at a compound annual growth rate (CAGR) of nearly 25% from 2025 to 2030, according to industry consultancy Grand View Research. Each of its five principal segments is also poised for substantial growth. During the same forecast period, Grand View Research projects:
Collectively, those markets’ forecasted growth should support the company’s international expansion efforts, including the pending acquisition of Australian digital healthcare platform Eucalyptus—a company that has served more than 775,000 customers since its founding in 2019. The deal, which Hims & Hers announced in February, is expected to close in the second half of 2026 and will broaden the company’s global footprint while supporting its long-term 2030 target of at least $6.5 billion in revenue. According to a Hims & Hers press release, “Eucalyptus currently has an annual revenue run-rate (ARR) north of $450 million…[and] deploys a rigorous capital allocation framework, delivering triple-digit year-over-year ARR growth in each quarter of calendar year 2025.” As part of the acquisition, Tim Doyle, co-founder and CEO of Eucalyptus, will become the SVP of International at Hims & Hers, overseeing the company’s international business. GLP-1 Pivot and AI Investments Could Drive Growth in Q2The company’s weight-loss drug pivot in Q1 has yet to show up in the books, but that should change in Q2. After Novo Nordisk dismissed its patent infringement lawsuit against Hims & Hers, the telehealth platform embraced a new strategy of selling branded GLP-1s through a partnership with Novo. Since that agreement, Hims & Hers has fulfilled more than 125,000 Wegovy shipments and is on track to add more than 100,000 new weight-loss subscribers per month through year-end. That was enough to prompt management to raise its full-year guidance to a revenue range of $2.8 billion to $3 billion, alongside $275 million to $350 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). Another catalyst is the company’s heavy investment in artificial intelligence (AI) and data infrastructure. Hims & Hers is building provider and consumer AI copilots, expanding its in-house AI team, and acquiring YourBio for at-home blood sampling, which should strengthen a proprietary data flywheel that management says will create a durable competitive advantage. Together, international expansion, AI investment, and data-related initiatives should build on the top-line growth the company is already experiencing. Over the past five years, Hims & Hers has posted average annual revenue growth of more than 74%, while quarterly revenue growth over the past five quarters has averaged nearly 53%. A Growth Stock With a Lot of Growing to DoNotably, Hims & Hers Health is dealing with some margin compression, and its international expansion efforts to acquire Eucalyptus could dilute shareholders in the future. The company has borrowed $350 million through zero-coupon convertible senior notes from institutional investors that mature in 2032. While the zero-interest component looks appealing, if shares of HIMS reach $29.53 or higher by 2032, those notes can be converted into shares. Even so, between the forecast CAGR of its various business segments, management’s increased full-year guidance, and ongoing top-line expansion, Hims & Hers Health could offer meaningful upside for investors looking to add a buy-low candidate to their portfolios. After losing around 64% over the past year, the stock has recently recovered from oversold territory based on its Relative Strength Index on the three- and six-month charts. A consensus Hold rating doesn’t offer much encouragement to speculative investors; the stock’s average 12-month price target suggests nearly 31% upside, while the high-end estimate implies more than 104% potential upside. Volatility is likely to continue, as evidenced by the stock’s current beta of 2.43 and elevated short interest of 31.4% of the float. However, bearish sentiment is substantially lower than it was when the stock’s short interest was at its all-time high in Q3 2025, when $4.27 billion worth of shares were shorted versus $1.72 billion today. |
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