Hims & Hers (HIMS): A Regulatory Tailwind and Telehealth Edge in the GLP-1 Gold Rush

The FDA’s recent crackdown on compounded GLP-1 drugs—a $2 billion market rife with regulatory risks—has created a seismic shift in the weight loss and wellness industry. Enter Hims & Hers (HIMS), which is capitalizing on this disruption with 111% revenue growth and a 346% jump in net income in Q1 2025. This isn’t just a story of fleeting momentum; it’s a masterclass in strategic adaptation, positioning HIMS to dominate a $65 billion GLP-1 market primed for consolidation.

Why HIMS Is Winning the GLP-1 Regulatory Game

The FDA’s decision to ban unregulated compounded versions of GLP-1 drugs like Wegovy and Ozempic has left a void in the market. While giants like Novo Nordisk (NVO) and Eli Lilly (LLY) face pricing backlash and supply constraints, HIMS has sidestepped these risks entirely.

Instead of relying on risky compounded formulations, HIMS has forged exclusive licensing partnerships with NVO and LLY to distribute FDA-approved GLP-1 medications directly through its telehealth platform. This shift not only avoids regulatory scrutiny but also secures stable revenue streams. For instance:
- Q1 2025 online revenue hit $576.4 million, up 115% YoY, as subscribers surged to 2.4 million (+38% YoY).
- Monthly revenue per subscriber jumped 53% to $84, fueled by personalized health plans integrating GLP-1 medications with dermatology, sexual health, and mental wellness services.

Valuation: 31x 2025 FCF vs. Peers Stuck in a Slow-Growth Rut

HIMS trades at 31x 2025 Free Cash Flow (FCF), a premium to NVO (15x) and LLY (12x). But this multiple is justified:
- 2025 FCF is projected to hit $200 million, up from $62 million in 2024, as gross margin stabilizes post-Q1’s temporary dip (73% vs. 82% in 2024).
- Long-term targets are aggressive but achievable: $6.5 billion in revenue and $1.3 billion in EBITDA by 2030, backed by a scalable subscription model and partnerships.

Why HIMS Beats Overhyped AI Stocks in 2025

While investors chase speculative AI stocks with no proven revenue models, HIMS offers tangible, regulated growth:
1. First-Mover Advantage: Its telehealth platform integrates FDA-approved medications with diagnostics and personalized care—a moat no AI startup can replicate.
2. Regulatory Tailwind: The FDA’s actions are a gift for HIMS, which now holds a defensible position in a shrinking compounded drug market.
3. Sustainable Margins: Adjusted EBITDA margins hit 16% in Q1, up from 12% in 2024, and will expand further as scale benefits kick in.

The Bottom Line: Buy HIMS Before the Crowd Catches On

HIMS isn’t just riding a GLP-1 wave—it’s redefining the future of healthcare access. With $274 million in cash, a 2.4 million subscriber base, and partnerships that secure its place in a $65 billion market, this is a buy at current levels.

Act now: The FDA’s crackdown is irreversible, and HIMS’s telehealth-led strategy ensures it captures the largest share of a reshaped market. Unlike overhyped AI stocks, this is a bet on a company with proven execution, regulatory safety, and a path to $6.5 billion in revenue.

Note: Data as of Q1 2025. Risks include regulatory changes and execution delays.