Hims & Hers Health: Navigating Regulatory Headwinds with Strategic Resilience
18min read The U.S. court’s recent decision to end emergency exceptions for compounded semaglutide has thrown a spotlight on Hims & Hers Health’s ability to pivot its business model. While the ruling eliminates a key revenue stream, the company’s focus on diversification and telehealth infrastructure has investors like Truist bullish on its long-term prospects. Let’s unpack how Hims & Hers could turn regulatory pressure into an opportunity.
The Regulatory Crossroads: Semaglutide’s End and Hims & Hers’ Options
The May 22, 2025, deadline to halt compounded semaglutide production marks a turning point. For Hims & Hers, which generated $225 million in 2024 revenue from compounded versions of the drug, the loss is material but not existential. The company had already planned to phase out the product by Q1 2025, anticipating the regulatory shift.
However, the ruling’s broader impact is significant. Novo Nordisk, the maker of Ozempic and Wegovy, has long argued that compounded generics undermine its market position. The court’s decision reinforces its stance, leaving compounding pharmacies scrambling. For Hims & Hers, the challenge is twofold: replacing lost semaglutide revenue and avoiding reputational damage in a crowded weight-loss market.
Truist’s Bullish Case: Revenue Growth Amid Transition
Truist’s analysis highlights Hims & Hers’ ability to offset semaglutide’s loss through its core services. The firm’s $2.3–$2.4 billion annual revenue guidance for 2025 hinges on three pillars:
1. Telehealth Expansion: Its platform, which connects patients with doctors for prescriptions, remains a cash cow. Truist estimates this segment could grow by 8% sequentially in 2025.
2. Alternative Therapies: While semaglutide is gone, the FDA’s delayed crackdown on tirzepatide (Eli Lilly’s Mounjaro/Zepbound) provides a temporary lifeline. Hims & Hers plans to shift customers to FDA-approved therapies or personalized semaglutide formulations (allowed under strict patient-specific prescriptions).
3. Cost Management: The company’s projected $270–$320 million profit range assumes disciplined spending, with CEO Andrew Dudum emphasizing “operational excellence” to protect margins.
The Numbers Underpinning Optimism
- Weight-Loss Revenue Outlook: Truist expects Hims & Hers to generate $725 million from weight-loss drugs in 2025, excluding post-May semaglutide sales. This represents 30% of the company’s total revenue guidance, underscoring its focus on diversification.
- Stock Target: Truist’s $33 price target (up 20% from current levels) assumes Hims & Hers can hit its 2025 revenue targets. However, near-term volatility is likely as investors digest the regulatory changes.
The Regulatory Wildcard: Compounding’s Future
The Texas court’s denial of an injunction against compounding pharmacies signals a broader crackdown on unregulated generics. While this protects Novo Nordisk’s profits, it risks reducing access to affordable treatments. For Hims & Hers, the path forward requires balancing compliance with customer demand.
The company’s bet on personalized dosing—a legally permissible practice for individual patients—could help retain users struggling with side effects. Meanwhile, expanding into telehealth services for chronic conditions (e.g., diabetes, mental health) could create new revenue streams.
Conclusion: A Stock for the Long Game
Hims & Hers faces a near-term revenue hit from the semaglutide ruling, but Truist’s analysis suggests the company has the tools to adapt. With a projected $2.3 billion revenue run rate and a $33 price target, investors betting on its telehealth dominance and strategic pivots may be rewarded.
Crucially, the stock’s valuation is now tied to execution. If Hims & Hers can meet its 2025 targets—$725 million in weight-loss revenue and $320 million in profits—its stock could rebound strongly. However, any misstep in transitioning customers or underestimating regulatory hurdles could prolong the pain.
For now, the data leans bullish: Truist’s optimism is grounded in the company’s infrastructure and the $225 million semaglutide loss being offset by core telehealth growth. Investors should monitor
