Shares of Hims & Hers Health (HIMS) fell nearly 14% on Wednesday after the company missed its quarterly earnings and cut its full-year guidance. The stock dropped to $19.76, down $3.18 from its previous close, as investors reacted to the news.
Key Details
The online health platform reported Q3'26 revenues of $890.3 million. This was slightly below analyst expectations by $2.5 million. Despite this, the company said its growth story remains strong. Hims & Hers had previously guided for revenues between $880 million and $900 million.
CEO Andrew Dudum explained that the company reduced marketing spending to prepare for a partnership with Eli Lilly (LLY) and to streamline its international brands. In Q3, Hims spent $247 million on marketing. This amount was 28% of its revenues, down from 39% in the same quarter last year. Dudum outlined three scenarios that led to this decision. He emphasized the need to position the company for future growth in the metabolic business.
Background
The company also adjusted its full-year guidance, indicating it expects challenges ahead. This guidance cut contributed to the stock's decline. According to Seeking Alpha, the market's reaction shows concerns about the company's ability to meet its growth targets amid changing market conditions.
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The drop in Hims & Hers Health shares may affect investor sentiment in the digital health sector, especially among telehealth platforms. A reduced marketing budget could slow customer acquisition, impacting future revenue growth.
Watch for the company’s next earnings report. It will provide further insights into its performance and strategic direction.
Based on reporting by: seekingalpha.com