Hims & Hers Health (HIMS) stock has been a wild ride lately, as investors struggle to decide whether it’s the future of consumer health or just a one-hit GLP-1 wonder. The stock has endured erratic trade within a wide $40-$70 range for most of this year, with several spikes testing the high ground over the past few months. Bulls see a powerful flywheel — a modern pharmacy that fits in your pocket. Bears see a company riding a fleeting drug craze. The result has been rather volatile rangebound trade all year.
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However, the Q3 report revealed something much more meaningful: sharp execution, expanding demand, and a business that continues to compound, even as growth shifts from blistering to simply outstanding. That’s why I remain Bullish on the stock and plan to keep buying on any pullbacks.
Growth Slowed, Still Exceptional
Let’s acknowledge something the bears have been pointing out first. This week’s figures showed that HIMS’ growth decelerated in Q3, but not to anything you’d call ordinary. Revenues rose 49% year-over-year to almost $600 million. Subscribers ended the quarter at roughly 2.5 million, up 21%, and monthly online revenue per average subscriber increased to $80, up 19%, once again exhibiting both incredible reach and rising engagement across all cohorts.
More customers are landing on the platform and, crucially, more of them are layering personalized plans and multiple treatments, which has been a major growth driver. Management reported a 50% year-over-year increase in subscribers using personalized treatment plans, as well as an 80% surge in subscribers treating multiple conditions, which now accounts for over 20% of the base. As an analyst, I like how HIMS is raising ARPU without resorting to gimmicks or one-off cross-sells.
On the profitability front, adjusted EBITDA reached $78 million (a 13% margin), while operating cash flow surged to $149 million — a 74% year-over-year increase. Free cash flow came in at $79 million, roughly flat from Q3 last year, but only because of intentionally higher capital spending to expand the company’s pharmacy infrastructure. Given how capital-light HIMS’s core business is, I expect the company to ultimately achieve free cash flow conversion rates above 90%.
HIMS Looks Beyond GLP-1
Now, here’s why I disagree with the bear case around GLP-1 drugs. Yes, recent FDA actions regarding semaglutide have reshaped the compounding landscape — and Hims has been clear-eyed about that. But the company also outlines how it continues to provide access within statutory exemptions while simultaneously de-risking its dependence on any single treatment through vertical integration and customer choice.
Hims has quietly built a vast compounding infrastructure — over 700,000 square feet today, with another 350,000 square feet coming online in Ohio. As internal capacity has scaled, it’s been able to cut prices on personalized GLP-1 plans by up to 20%. Meanwhile, ongoing discussions with Novo Nordisk (NVO) to carry branded Wegovy — including the oral version, if approved — further expand its weight-management portfolio. In my view, Hims isn’t a one-trick GLP-1 company, but a platform evolving into the curator of personalized health and weight solutions.
And there’s much more beyond weight loss. Testosterone care launched with instant product-market fit — notably, over 60% of new testosterone customers were already existing Hims subscribers, a powerful cross-sell indicator. On the Hers side, menopause care represents a massive, underserved market, with management targeting $1 billion in brand revenue by 2026. Finally, the upcoming expansion into diagnostics and lab testing lays the groundwork for a 2026 push into longevity-focused care.
In time, I believe the market will see HIMS through this lens, thereby recognizing the firm not as a GLP-1 story, but as a scalable, tech-driven health platform poised to lead in “personalized wellness.”
HIMS Valuation Looks Better Than It Screens
Given the company’s underlying operational improvements amid recent volatility, I believe HIMS remains undervalued. This year alone, the company has invested roughly $69 million in combined capital expenditures (capex) and software development to expand its compounding capacity and automation systems. While those investments temporarily impacted free cash flow in Q2 and Q3, they are strategic moves intended to lower unit costs, broaden access, and expand margins over time.
If we adjust for this deliberate reinvestment, the reported $79 million in free cash flow for Q3 would be much closer to the $149 million in operating cash flow — demonstrating that HIMS is capable of achieving nearly 100% free cash flow conversion in a normalized environment.
Looking ahead, HIMS is expected to generate approximately $443 million in operating cash flow and $254 million in free cash flow next year, as investors anticipate continued capex tied to international expansion and new product categories. At current share prices, that translates to a P/FCF multiple of around 40x. However, I think it’s more appropriate to evaluate HIMS on a P/OCF basis, given that free cash flow should ultimately converge toward operating cash flow as growth investments taper.
On that basis, the stock is effectively trading at roughly 23x next year’s potential free cash flow — a compelling multiple for a business that is both growing rapidly and structurally asset-light. While that framing might sound unconventional, HIMS is a unique company, and its long-term economics justify a differentiated valuation lens.
Is Hims & Hers Health (HIMS) a Buy, Sell, or Hold?
Wall Street’s view on HIMS remains divided, with both bulls and bears firmly entrenched in their positions. The stock currently holds a Hold consensus rating, based on two Buy, eight Hold, and two Sell ratings issued over the past three months. Notably, the average price target of $50.25 suggests 17% upside over the next 12 months.
A Durable Compounder Beyond the GLP-1 Hype
Overall, I believe Hims & Hers continues to defy the skeptics, proving it’s far more than a GLP-1 story. Through disciplined execution, expanding demand, and a scalable, asset-light business model, the company is steadily building a resilient digital health platform. Even as growth normalizes, profitability and cash generation remain robust, positioning HIMS as an attractive long-term compounder at current levels. I plan to keep buying on pullbacks and selling puts when volatility offers favorable entry points.