Hims margin reset passes its first anniversary with 2027 the test

In February 2026, the FDA declared the semaglutide shortage resolved, a decision that effectively shut down the compounded-drug business Hims & Hers had built much of its weight-loss revenue on.^[2] The company's stock fell as much as 27% in a day and lost roughly half its value within weeks.^[2] On March 9, Hims & Hers announced it would stop advertising compounded GLP-1 drugs, prioritize FDA-approved branded medications, and sign a deal to resell Novo Nordisk's Ozempic and Wegovy; Novo, which had sued the company, dropped its lawsuit.^[2]

One year later, the financial effects of that pivot are showing up clearly. In the second quarter of 2026, Hims & Hers reported revenue of $753.2 million, up 38% from a year earlier, but posted an adjusted loss of $0.10 a share, wider than the $0.07 loss analysts expected.^[1] Gross margin fell from 76% to 64%, and adjusted EBITDA margin dropped from 15% to 8%.^[1][2] The company swung to an $86.3 million GAAP net loss, compared with a $42.5 million profit in the same quarter last year, and posted $68.2 million in negative free cash flow.^[1][2] Cost of revenue more than doubled to $272 million as branded-drug costs flowed through the business.^[2]

The company still added roughly 300,000 net subscribers in the quarter, bringing its total to nearly 2.9 million, up 19%.^[1][2] But average monthly revenue per customer rose to $92 from $76 a year earlier, reflecting that branded medications cost more than the compounded products they replaced.^[2] Hims & Hers has shipped more than 125,000 Novo Wegovy prescriptions in the first six weeks of that arrangement and projects roughly $1.1 billion in GLP-1 revenue this year, up 46%.^[2] The company raised its full-year 2026 revenue guidance to $3.2 billion but cut its adjusted EBITDA forecast to $275 million to $325 million, down from an earlier range of $300 million to $375 million.^[1] Management has said it expects to return to net profitability in 2027, and has set a 2030 target of $6.5 billion in revenue with roughly 20% EBITDA margins, about double current levels.^[2] JPMorgan initiated coverage with a Neutral rating and a $32 price target for December 2027, near where shares traded at about $25 to $27.^[1][2]

Why it matters for patients

For people who were buying compounded semaglutide through Hims & Hers, the shift to brand-name Wegovy and Ozempic means paying more per month, since branded drugs carry a higher price than the compounded versions did.^[2] The company's own numbers show average customer spending rose from $76 to $92 a month as this transition took hold.^[2] Patients considering these medications should understand that the compounding option many companies advertised as a lower-cost alternative largely disappeared once the FDA declared the shortage over, and pricing across the industry has been shaped by that regulatory shift.^[2]

The financial strain on Hims & Hers itself — a widened loss, thinner margins, and a lowered profit forecast — does not directly change what a patient pays today, but it signals that the economics of reselling brand-name GLP-1 drugs are tighter than the compounding business was.^[1][2] Whether that pressure leads to price changes, service changes, or shifts in which products the company promotes is not yet known from these sources.

What happens next

Management has committed to net profitability in 2027, with the first read on that promise expected when Hims & Hers reports its first-quarter 2027 results.^[1] JPMorgan's price target is set for December 2027, tied to whether the company's margin recovery plan is confirmed by then.^[1][2] Longer term, the company has set a 2030 goal of $6.5 billion in revenue and about 20% EBITDA margins, roughly double its current profitability level, though that target remains unproven.^[2]