Hey there, bargain hunter. Sometimes a company posts nearly 50% revenue growth and the stock still falls off a cliff. That is exactly what happened to Hims & Hers Health (HIMS) on Monday, November 9, 2026.
Scoreboard
Q3 2026 revenue came in at $890.4 million, up 49% year over year. GAAP EPS landed at negative $0.14 versus a positive $0.06 expected. Adjusted EBITDA was $82.4 million, a 9% margin, against an $85.1 million consensus. Subscribers stood at 2.788 million, up 13% year over year. HIMS closed November 9 down 11.77%, then slid another roughly 3% after hours. Combined, the two-day hit erased close to 15% of market value.
What Actually Happened
The core problem was gross margin, which compressed to 57% from 74% in the same quarter a year ago. Even with revenue growing at a rapid clip, that level of margin deterioration absorbed most of the gains before they could reach the income statement.
Two forces drove the compression. The scaling of branded weight loss products in the international business, which carry lower gross margins, primarily drove this decline. On top of that, $18 million of weight-loss membership revenue was deferred to Q4 and is not included in Q3 revenue. Strip that out and the reported numbers looked even softer than reality.
Subscriber count also posted a net decline of about 100,000 from the prior quarter. Management attributed this to deliberately lower marketing spend in U.S. weight loss and to the brand transition overseas.
The Business and Its Pivot
Hims & Hers built its platform on cheap telehealth consultations and compounded GLP-1 drugs. That model ran into a wall. In March 2026 the company announced a strategic shift for its U.S. weight loss business, now planning to provide customers with access to a broad assortment of FDA-approved medications while offering compounded semaglutide only on a limited scale.
Then, three days before earnings, Hims & Hers struck a deal with Eli Lilly to expand access to Lilly’s FDA-approved obesity medicines through the Hims & Hers platform. Eligible patients can be prescribed and order Lilly’s injectable Zepbound and oral Foundayo without leaving the platform. Combined with the existing Novo Nordisk agreement for Wegovy and Ozempic, Hims now carries the full branded GLP-1 shelf. The catch: that shift carries financial consequences. Branded medications generally produce lower margins than compounded alternatives, meaning higher patient volumes may not translate into comparable profit growth.
The branded GLP-1 shelf Hims now carries did not appear by accident. Big pharma’s $1.3 trillion acquisition wave is reshaping which drugs reach patients and at what margin.
Key Numbers
- Domestic revenue: $657.1 million, up 21% year over year. International revenue: $233.3 million, up 321%.
- Monthly revenue per average subscriber: $105, up 30% year over year.
- Net loss: $33.0 million versus net income of $15.8 million in the same quarter of 2025.
- Full-year adjusted EBITDA guidance cut to $257 million to $277 million, from $275 million to $325 million. Full-year revenue narrowed to $3.13 billion to $3.15 billion, below the $3.21 billion analysts had expected.
- Q4 revenue guidance: $875 million to $895 million.
Is It Cheap?
The current market cap sits around $5.35 billion against full-year revenue guidance of $3.13 to $3.15 billion. That is roughly 1.7x forward revenue for a company growing at 49%. The valuation looks interesting, but only if margins stabilize.
Bull / Base / Bear
Bull: Gross margin declines start to moderate as the pace of mix shift toward international and weight loss begins to slow, and technology investments set a foundation for further margin expansion. Two branded GLP-1 partnerships put Hims at the front of a massive cash-pay weight loss market.
Base: Margins trough near 57% through early 2027, subscriber growth resumes as Q1 marketing picks up, and the deferred revenue boost helps Q4. EBITDA recovers toward the $300 million range in 2027.
Bear: Branded GLP-1 margins stay structurally below the old compounded model. The company has flagged that subscriber headwinds could continue into Q4 because of lower domestic marketing spend. If international growth also slows, the revenue multiple contracts further.
Action Plan
Do not chase the bounce. The margin story needs at least one more quarter of data. A disciplined approach: consider a starter position at current levels (around $22 to $23), and add only if Q4 gross margin holds above 55% and sequential subscribers return to growth. Trim if gross margin falls below 54% or Q4 guidance gets cut again.
The discipline of waiting for margin confirmation before sizing up applies beyond healthcare. Broadcom’s selloff despite record revenue shows how a gap between business performance and market pricing creates a structured entry framework.
Cheap Investor Checklist
- Gross margin: watch for stabilization above 57% in Q4
- Sequential subscriber growth: needs to turn positive in Q1 2027
- Monthly revenue per subscriber: $105 is the floor to hold
- International revenue mix: must grow without further margin drag
- Lilly and Novo GLP-1 attach rates: any disclosure on branded adoption pace
- Free cash flow: positive for full year per management guidance; confirm in Q4
- EBITDA guidance: any further cuts are a red flag
Bottom Line
If gross margin finds a floor in Q4 and the Lilly partnership drives meaningful volume at tolerable margins, the selloff is likely overdone at 1.7x revenue. If the branded GLP-1 transition keeps compressing margins through 2027, today’s price is not a bargain. Watch the Q4 gross margin number above everything else.
