Hims & Hers Health Faces Strategic Choice Between Semaglutide Expansion or Core Business, BofA Says

Hims & Hers Health (NYSE: HIMS) stands at a critical juncture, its future hinging on a choice between doubling down on its high-growth semaglutide initiatives or refocusing on stabilizing its core telehealth and subscription-based business. Bank of America’s May 2025 analysis underscores this dilemma, framing the company’s trajectory as a balancing act between aggressive expansion in GLP-1 therapies and operational resilience in a volatile market.

The Strategic Crossroads

BofA identifies two distinct pathways for Hims & Hers:

1. Semaglutide Expansion: By scaling its partnership with Novo Nordisk to distribute Wegovy auto-injector pens—branded semaglutide for obesity—Hims & Hers could capture over $900 million in GLP-1 revenue in 2025. This path leverages its direct-to-consumer model and personalized dosing approach, but it carries significant risks. Litigation over dosage personalization, regulatory scrutiny, and supply chain challenges loom large. For instance, transitioning subscribers from compounded semaglutide (which faces legal disputes) to branded alternatives may disrupt customer retention.

2. Core Business Stabilization: Focusing on telehealth services, men’s and women’s health subscriptions, and legacy products could help Hims & Hers achieve the lower end of its $2.3–$2.4 billion full-year revenue guidance, but at the cost of slower growth. This approach mitigates litigation risks but leaves the company vulnerable to competition in its traditional markets.

Financial Performance and Execution Risks

Hims & Hers delivered a strong first-quarter 2025, with revenue surging 111% year-over-year to $586 million, driven by GLP-1 sales. However, the company’s second-quarter guidance ($530–$550 million) fell short of expectations, signaling macroeconomic pressures and margin erosion. Gross margins dipped 2 percentage points sequentially due to scaling costs and strategic pricing, while adjusted EBITDA reached $54 million.

The firm’s long-term ambitions—$6.5 billion in revenue and $1.3 billion in adjusted EBITDA by 2030—rely heavily on sustained GLP-1 growth and new product launches, such as menopause and testosterone therapies. Yet, BofA warns that margin pressures could intensify as the company invests in marketing and litigation defense.

Analyst Consensus: Caution vs. Optimism

BofA’s raised price target to $28 reflects operational improvements but stops short of optimism due to execution risks. The firm’s Underperform rating contrasts with more bullish peers:
- Needham ($61 price target, Buy): Highlights Q1 outperformance and long-term growth potential.
- Leerink Partners ($42, Positive): Sees upside in next-gen GLP-1 products.
- Cowen and Truist ($Hold): Acknowledge risks but recognize Hims & Hers’ niche in personalized healthcare.

Conclusion: A High-Stakes Gamble on Growth

Hims & Hers’ fate hinges on its ability to navigate a treacherous balancing act. Expanding its semaglutide business could unlock the $6.5 billion 2030 revenue vision, but only if it avoids litigation pitfalls and maintains margin discipline. The company’s 2025 EV/EBITDA multiple of 20–21x suggests investors already price in this optimism, yet BofA’s caution underscores the risks of overextension.

The core business, meanwhile, offers stability but little room for breakout growth. A strategic misstep—whether overcommitting to GLP-1 without securing supply chains or underinvesting in innovation—could derail progress. With $599 monthly pricing for Wegovy pens and a 2030 target 2.8x larger than its 2025 guidance, Hims & Hers must prove it can manage both growth and governance.

For now, the data paints a mixed picture: Q1’s 111% revenue growth is impressive, but the 2025 EV/EBITDA multiple is a reminder of the premium investors demand for risky bets. The company’s choice between expansion and stability will determine whether it becomes a leader in personalized GLP-1 therapies—or a cautionary tale of overreach. The next few quarters will be decisive.