Hims & Hers Health (HIMS): A Fresh Look at Valuation After FDA Warning Letter Sparks Regulatory Concerns

If you are holding or eyeing Hims & Hers Health (HIMS), this week’s shakeup might have given you some fresh questions. The U.S. Food and Drug Administration just hit the company with a warning letter, citing Hims & Hers for making allegedly false or misleading claims about its compounded semaglutide products. The FDA said these online promotions implied the treatments were equivalent to FDA-approved drugs for weight loss, when in fact, they are not. Hims & Hers now has two weeks to respond and fix the issues or risk further regulatory action. This moment is certainly drawing market attention.

After the news broke, the stock fell roughly 8%, suggesting investors are taking the regulatory risk seriously. This comes in a year when shares have surged a staggering 155%, riding momentum from new product launches, including entries into the competitive testosterone and menopause markets, and ambitious growth targets. Still, regulatory scrutiny appears to have reminded the market that risk can emerge quickly for digital health platforms, especially those pushing aggressively into telemedicine and pharmacy services.

So with shares off their highs after an impressive run, is this a compelling entry point, or is the market already factoring in future growth for Hims & Hers?

Most Popular Narrative: 32.8% Undervalued

According to BlackGoat, the narrative signals that Hims & Hers Health is currently trading at a substantial discount to its estimated fair value, presenting a potentially rare opportunity for investors seeking strong upside in a fast-evolving healthcare platform.

The Case for Hims Hims & Hers Health is not a telehealth gimmick or a GLP-1 hype stock; it is quietly becoming the top-of-funnel infrastructure layer for healthcare in the United States. It is executing a strategy similar to Amazon, Spotify, and Costco: deliver more value per dollar spent, reinvest scale advantages, and win through customer-centric efficiency. However, unlike those companies, Hims operates in a $4 trillion market that is in urgent need of reinvention.

Curious about what underpins this bold conclusion? There is one crucial framework at the heart of this valuation, rooted in aggressive long-term revenue and profit expansion. Want to see exactly how Hims compares to industry leaders, and what sets this growth story apart? There are a few surprising drivers fueling this compelling price target. Find out what they are by exploring the full narrative.

Result: Fair Value of $114 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory actions and sudden partnership changes could pose meaningful setbacks. This reminds investors that execution risk remains a central catalyst for this growth story.

Find out about the key risks to this Hims & Hers Health narrative.

Another View: Market Metrics Tell a Different Story

While the long-term outlook may appear bright by some calculations, a closer look at price-to-earnings compared to the sector average shows Hims & Hers trading at a significant premium. Could the market be overestimating its growth story?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Hims & Hers Health to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Hims & Hers Health Narrative

Not convinced by this perspective or curious to reach your own conclusions? You can dive into the numbers and build your own take in just a few minutes. Do it your way

A great starting point for your Hims & Hers Health research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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