JP Morgan resumes Hims & Hers coverage at neutral with $32 price target

JP Morgan resumed coverage of Hims & Hers Health on September 11 with a neutral rating and a $32 price target, pointing to headwinds in the telehealth company's GLP-1 business ^[1]. The bank had suspended coverage in June and last rated the stock overweight ^[1].

The call came after a quarter in which Hims & Hers grew revenue 38% to $753 million but swung from a $42.5 million profit a year earlier to an $86.3 million loss ^[2]. Gross margin — the share of each sales dollar left after paying for the product sold — fell to 64% from 76% a year earlier ^[2]. It was the second quarter in a row with that shape: in the first quarter, gross margin was 65% versus 73% a year earlier, and the company went from a $49.5 million profit to a $92.1 million loss ^[2]. Subscribers reached 2.9 million, and the company raised full-year revenue guidance to as much as $3.3 billion ^[2].

The squeeze traces to what Hims & Hers sells. While semaglutide was on the FDA's shortage list, compounding pharmacies could legally make their own versions of the drug, and GLP-1 products grew to more than 35% of the company's business, with gross margin peaking at 82% in early 2024 ^[2]. Novo Nordisk, which makes Wegovy, sued over promotion of compounded copies and in June 2025 ended its partnership with the company, sending the stock down 30% in a single day ^[2]. The shortage resolved and the compounded market closed. In March 2026, after dropping the lawsuit, Novo agreed to distribute its branded drugs through the platform, including Wegovy ^[2]. Hims & Hers also dispenses Eli Lilly's Zepbound, the brand name for tirzepatide ^[2].

That handoff changes the math. Reselling branded medication means the margin goes to the drugmaker first, and JP Morgan's framing is that Hims & Hers profitability now depends on selling more branded drugs at lower margins while the manufacturers capture the value ^[2]. The company booked $33.5 million in restructuring charges, including write-downs on inventory of a compounded drug it can no longer sell that way ^[2]. Its finance chief has said gross margin will compress by a further couple of points in coming quarters ^[2].

JP Morgan had cut its price target to $33 in May, citing the shift from compounded to branded GLP-1s ^[2]. The $32 target attached to the September 11 resumption is a separate figure from that earlier note ^[1][2].

Why it matters for patients

Hims & Hers is one of the larger direct-to-consumer channels for GLP-1 medication in the United States, so the mix of products it sells shapes what many patients see when they sign up for treatment ^[2]. The compounded versions that were available during the shortage are no longer part of that business, and the branded products now dispensed through the platform — Wegovy (semaglutide) and Zepbound (tirzepatide) — cost more out of pocket than the compounded versions did ^[2].

A bank's rating does not change what a clinician prescribes or what an insurance plan covers. What the note describes is a company whose per-dollar economics have thinned as it moved from making a copy of a drug to reselling the original ^[2]. Whether Hims & Hers subscription prices for GLP-1 treatment will change has not been disclosed, and it has not been reported whether the company will adjust which products it offers.

The company is also competing with larger players moving into weight management, including Amazon's program through One Medical ^[2].

What happens next

Hims & Hers has set a 2030 target of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA ^[2]. Management has said gross margin will fall by another couple of points in coming quarters but has not given a date for when that compression is expected to stop ^[2]. The stock recently traded around $28.81, up 4.7% on the day, and sits roughly 78% below its 2025 peak ^[1][2]. No date for the next earnings report appears in these accounts.