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Hims & Hers investors run for the hills despite earnings beat and cheery outlook

Hims & Hers outlook and earnings weren’t enough to quell investors’ fears.

2/24/25 5:02PM

Hims & Hers Health, the tele-pharmacy known for selling copycat versions of popular weight-loss drugs, tanked in aftermarket trading despite largely meeting Wall Street expectations and giving upbeat guidance.

The company reported earnings per share of $0.12, edging above the $0.11 analysts polled by FactSet were expecting. It also reported $481.1 million in revenue, compared to the $470.3 million analysts expected.

Hims & Hers said it expected revenue for the first quarter of 2025 to be between $520 million and $540 million, compared to the $497 million analysts had penciled in. This was the fifth straight quarter that Hims & Hers turned a profit, and 2024 marked its full profitable year.

Still, investors sent the company’s stock down more than 15% in after-hours trading.

Investors are likely still spooked by the news that the Food and Drug Administration declared that semaglutide, the active ingredient in Novo Nordisk’s Ozempic and Wegovy, is no longer in a shortage, limiting Hims & Hers’ ability to make copycat versions.

Removing it from the shortage list means Hims & Hers can no longer sell exact copies of the drug; it’s only allowed to if it adjusts the drug. Hims & Hers CEO Andrew Dudum said in a Friday statement that the company plans to continue selling compounded semaglutide in the form of “personalized treatments.”

Hims & Hers said in its letter to shareholders that it can sell “personalized titration schedules and dosage levels that are not essentially copies of commercially available medications” even with a shortage in place.

But in a footnote repeated three times in the letter, the company said the FDA move “could constrain our ability to continue providing access to compounded semaglutide on our platform once our current inventory has been sold.”

The company did not explicitly report how much it made selling weight-loss drugs, which it started doing in May 2024. It did say that revenue from non-GLP-1 drugs was $1.2 billion of the $1.4 billion it brought in 2024, suggesting it sold roughly $200 million in copycat weight-loss drugs last year.

Matt Phillips1h

Margins, and selling the news: analysts look to explain Oracle's tumble

The somewhat counterintuitive tumble in Oracle shares continued into afternoon trading Friday, despite Wall Street analysts’ more-or-less favorable reaction to Oracle’s investor day presentation Thursday, where executives said the company’s AI cloud business would eventually sport margins of between 30%-40%, far better than the figures reported by The Information back on Sept. 7.

And yet, the stock is on its way to its worst day in the last six months. What gives?

Gil Lauria, who covers Oracle for D.A. Davidson & Co. — who has it at “hold” with a $300 price target — has a theory, telling Sherwood:

“Investors are disappointed that the entire growth acceleration in Oracle is from the Oracle Cloud Infrastructure business, and that Oracle expects the rest of the business to grow low single digits.

The other disappointment came from Oracle acknowledging that the GPU rental business only had 30-40% gross margins, far lower than the 80% gross margins for the rest of the business.”

Other analysts we’ve chatted with on background say they’re not convinced the margin story is the source of today’s slump, pointing to the also plausible explanation that the drop might just be a sign traders bought the stock ahead of the presentation to analysts on Thursday anticipating positive announcements, and now they’re selling simply selling the news.

Analysts generally like what they heard from Oracle, but shares are down

Gil Lauria, who covers Oracle for D.A. Davidson & Co. — who has it at “hold” with a $300 price target — has a theory, telling Sherwood:

“Investors are disappointed that the entire growth acceleration in Oracle is from the Oracle Cloud Infrastructure business, and that Oracle expects the rest of the business to grow low single digits.

The other disappointment came from Oracle acknowledging that the GPU rental business only had 30-40% gross margins, far lower than the 80% gross margins for the rest of the business.”

Jon Keegan4h

Analysts generally like what they heard from Oracle, but shares are down

The big news out from the Oracle AI World conference was broadly positive: that margins on cloud infrastructure can be as high as 35%, and that the company predicts $166 billion in infrastructure revenue by 2030.

And in the wake of that news, today UBS raised its price target for Oracle shares to $380 from $360, saying they are undervalued.

But investors appear to have some concerns about Oracle’s huge capex plans, which are fueled by huge AI infrastructure deals with OpenAI and Meta, as shares dropped over 7% in Friday trading.

Analysts have pointed to Oracle’s high cash burn as it pursues its AI build-out and potential financing needs as flies in the ointment that could blunt the impact of the company’s strong longer-term growth forecasts.

On Friday, Jeffries analysts wrote:

“Questions remain about ORCL’s capex requirements to meet growing demand, as there was no forward-looking commentary on capex at the Analyst Day. Capex will need to ramp in line with [Oracle cloud infrastructure] revenue growth, raising concerns about ORCL’s financing options to support this expansion.”

However, if that’s the reason why the stock is getting hit today, it would mark a distinct change in how investors are evaluating the AI trade. Companies have tended to be increasingly rewarded for their aggressive capex commitments to enhance the boom, based on optimism that investments in this would-be revolutionary technology will bear fruit.

Friday’s dip comes on the back of a strong run leading up to the yesterday’s investor conference, fueled by a flurry of AI headlines. Oracle shares have gained over 18% in the past three months and more than 70% so far this year, well outpacing the Nasdaq’s approximately 7% and 16% rise over the same time periods.

Matt Phillips5h

AST SpaceMobile drops after Barclays cuts rating to “underweight”

AST SpaceMobile, which provides cellular services from space, dove in early trading after Barclays analysts cut their rating on the shares to “underweight” (essentially a sell) from “overweight” (or a buy), citing “excessive” valuation on the still money-burning company. The fact that analysts went from “buy” to “sell” — with no momentary stop at a “hold” or “neutral” rating — makes it a fairly rare “double downgrade.”

They wrote:

“Valuation has run ahead of fundamentals... In our last update, we increased our price target from $38 to $60 as we took a more constructive view on pricing; we found it supportive that TMUS/Starlink launched a text only service for $10 per month and believe that AST products which will be richer (text, call, broadband) could see higher prices points. Since then the stock price has doubled from $48 to $95.7.”

With the shares up almost 120% over the last month through Thursday, and a price-to-forward-sales ratio of 140x — the Nasdaq Composite is around 5x — the stock might be due for a cooling-off period.