Hims & Hers Health Inc (NYSE: HIMS) is making waves in the stock market, surging 21.7% by 2:00 p.m. ET on Wednesday and peaking at a 24.8% gain earlier in the day. This rally vastly outperformed the broader market, where the S&P 500 edged up just 0.1% and the Nasdaq Composite remained flat.
Why Hims & Hers Stock Is Soaring
The telehealth powerhouse announced a significant expansion into at-home testing following its acquisition of Trybe Labs, a New Jersey-based facility specializing in mail-in blood sample testing. This move will allow Hims to offer diagnostic services directly to customers, eliminating the need for third-party lab visits. The initiative aims to give users more control over their health while helping to detect potential diseases early.
How At-Home Testing Could Transform Hims & Hers’ Business
By integrating blood testing into its telehealth platform, Hims & Hers can streamline its prescription and treatment process. The company will be better positioned to expand offerings in lucrative healthcare segments, such as:
- Low Testosterone Treatments: A high-demand market with significant revenue potential.
- Menopausal Support: A growing segment with long-term recurring revenue opportunities.
- Weight Management & GLP-1 Drugs: Including compounded alternatives to blockbuster drugs like Ozempic.
The removal of friction in obtaining necessary blood work could drive user adoption and increase conversions for prescription-based treatments, boosting revenue growth.
The Red-Hot Growth of Hims & Hers
The telehealth disruptor has been on a tear, with its stock skyrocketing over 600% in the past year. Its direct-to-consumer model and strong marketing strategy have fueled rapid adoption, proving that its business model resonates with modern healthcare consumers.
Potential Risks Investors Should Watch
Despite the impressive growth, Hims & Hers carries a lofty valuation, with a price-to-earnings (P/E) ratio of 160. While high growth may justify this premium, any slowdown could pressure the stock price.
Another looming challenge is the company’s ability to continue selling compounded GLP-1 weight-loss drugs. The FDA currently permits this due to supply shortages, but once major pharmaceutical companies resolve these issues, regulators may clamp down. Losing this revenue stream could impact Hims’ future earnings trajectory.
What’s Next for Hims & Hers?
With its expansion into at-home testing, Hims & Hers is doubling down on its vision of making healthcare more accessible. Investors and analysts will be closely watching how this move translates into financial performance in the coming quarters. As the telehealth space evolves, HIMS stock remains a key player in shaping the future of digital healthcare.
