HIMS Earnings: The 14.4% Implied Move Is the Easy Part — The Direction Is What Matters

The options market is pricing a ±14.4% move in Hims & Hers (HIMS) for Tuesday's after-market-close earnings on August 10. That's the headline number everyone's looking at. But 14.4% is just the magnitude — the part of the setup that's already done. The question nobody's asking the right way is whether the options chain's implicit assumption that this move is symmetric actually makes sense.

Here's what the options market is telling us. That ±14.4% figure comes from the at-the-money straddle — the combined price of a call and put at the current strike, expiring just after the report. It's the market's mechanical estimate of where the stock could end up, not a prediction. The current implied move sits right around the two-year historical average of ±14.6% and slightly below the median of ±13.7% across HIMS's 21 earnings reports since 2022. So the options market isn't panicked. It's calibrated.

But calibration is one thing. Distribution is another.

HIMS has only beaten its implied move — meaning the stock moved more than options expected — in 5 of 16 reports, about 31% of the time. That means in roughly seven out of ten cases, the actual move was smaller than what traders paid for. More importantly, the recent history of HIMS around earnings isn't volatile-up-and-down. It's consistently down. The stock fell 14.1% on May 11 after Q1 results, dropped 12.4% on August 4, 2025, and fell 3.6% on November 3, 2025. Even the February 23 report — the one time it barely moved, down just 0.3% — was a miss on EPS. Four straight negative earnings reactions. The options market doesn't encode direction, but the pattern of actual outcomes does.

So what's HIMS actually reporting, and why has the stock been selling into these numbers?

Q1 2026 was the inflection point, and it wasn't pretty on the profitability side. Revenue came in at $608 million, up 4% year-over-year. Subscribers grew to 2.6 million, up 9%. Those are the headline numbers that keep the growth narrative alive. But gross margin collapsed from 73% to 65%. Adjusted EBITDA — earnings before interest, taxes, depreciation, and amortization, the company's preferred profitability measure — more than halved, falling from $91.1 million to $44.3 million. And the company swung from $49.5 million in net income a year earlier to a $92.1 million net loss.

Monthly revenue per average subscriber dropped from $85 to $80, a 6% decline. That's the signal most people skim past. It means HIMS isn't just adding customers — it's adding customers who generate less revenue than the ones already in the system. The company attributed the margin compression to its weight-loss (GLP-1) strategy: shorter shipping cadences, higher fulfillment costs, restructuring charges, and shifts in product mix toward international offerings. Then there's the regulatory overhang around compounded GLP-1s, which management flagged as a potential source of future cost increases or operational disruption.

The Q2 guidance the company gave back in May frames the earnings window: revenue of $680 million to $700 million, adjusted EBITDA of $35 million to $55 million (a 5% to 8% margin). So the market's real question on Tuesday is whether Q2 revenue hit the top of that range while margins showed stabilization — or whether the GLP-1 cost problem deepened further.

Yes, the stock could still gap higher. If HIMS reports revenue at the top end of guidance, shows signs that gross margins are stabilizing above 65%, and gives a strong H2 outlook that includes the proposed Eucalyptus acquisition, the move could swing positive. There's room for a relief rally at these levels.

But understanding what I understand about how these kind of businesses behave under margin pressure would tell me that the plumbing of this setup points the other way. A company whose revenue per user is declining, whose gross margin has contracted eight points in one quarter, and whose adjusted EBITDA has been cut in half isn't in a position to beat and raise unless something structural changes. The GLP-1 cost problem isn't a one-quarter hiccup — it's the new operating model. Compounded weight-loss drugs require faster shipping, more packaging, higher pharmacy operations cost. That's a lower-margin business than what HIMS was running with hair loss and dermatology scripts.

If the Q2 report confirms that margin compression is continuing and the Q3 guidance doesn't show a clear path back to the 73% gross margin territory, the downside move could exceed the 14.4% that options are currently pricing. The historical distribution supports that — the 80th percentile of actual HIMS moves is ±22%, and the 95th percentile is ±29.8%. The stock is already trading near the bottom of its 52-week range, which means there's not much left to fall structurally. But "near the bottom" doesn't mean "can't go lower."

The mechanical takeaway is this: the options market has done its job. It's priced the right magnitude based on history. What it can't price is the direction skew created by deteriorating unit economics. If you're trading straddles, you're paying for a move that may be smaller than you think — HIMS beats the implied move only 31% of the time. If you're holding the stock, Tuesday tells you whether the GLP-1 transition is a temporary drag or a permanent re-rating of the margin profile.

What to watch on the call: the gross margin number itself, the updated monthly revenue per subscriber, and any concrete language about when — if — the weight-loss business reaches the margin profile that justified the earlier valuation. If management can't give you that timeline, the market will price accordingly.

The views expressed here are the author's own and do not constitute investment advice.