Should Investors Reassess Hims & Hers After FDA Calls Out Super Bowl Drug Ad in 2025?

If you have been eyeing Hims & Hers Health stock lately, chances are you have noticed just how much this name has grabbed the market’s attention. Whether you are considering jumping in or debating whether to hold on after a monster run, you are not alone. The conversation around Hims & Hers is louder than ever. There is good reason for that: shares have skyrocketed 114.4% since the start of the year and are up a staggering 1,130.5% over the last three years. That is the kind of performance that gets even the most seasoned investors to pause and wonder if now is the right moment to make a move or take some chips off the table.

Of course, those gains have not come without a few bumps. Since last week, the stock has dipped 6.8%, and over the last month it is down 2.7%. Some of this short-term weakness has been linked to headline risk, especially news of the FDA calling out Hims & Hers for a Super Bowl ad that allegedly broke drug promotion rules and ongoing FTC scrutiny over their subscription cancellation practices. While these stories have sparked some caution among investors, the big picture still looks lively, with the five-year return sitting at an impressive 422.4%.

So, is the current price tag fair, or has the hype run ahead of fundamentals? Using six classic valuation checks, Hims & Hers Health scores a 2, meaning it appears undervalued in two out of six major ways. But like any savvy investor, you know that checklist approaches only tell part of the story. Let us break down what the valuation methods say and set the stage for an even smarter way to think about this stock’s worth.

Hims & Hers Health scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Hims & Hers Health Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model values a business by projecting its expected future cash flows and discounting those cash flows back to today's dollars. For Hims & Hers Health, this approach uses a 2 Stage Free Cash Flow to Equity model, incorporating both analyst forecasts and extrapolations for longer-term projections.

Currently, Hims & Hers Health generates Free Cash Flow of $159.0 Million. According to analyst consensus, annual Free Cash Flow is expected to rise substantially, reaching $449.3 Million by 2029. Beyond the analysts' five-year window, further growth projections are extrapolated, with Simply Wall St estimating further increases through 2035.

Using this trajectory, the DCF model calculates an intrinsic fair value of $62.47 per share. Compared to current market pricing, this suggests the stock is trading at a 13.5% discount based on the cash flow outlook.

In summary, the DCF model indicates that Hims & Hers Health’s cash flow potential supports its current share price and suggests that the stock may be undervalued at today's levels.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hims & Hers Health.

Our Discounted Cash Flow (DCF) analysis suggests Hims & Hers Health is undervalued by 13.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Hims & Hers Health Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a popular metric for evaluating profitable companies because it compares a company’s current share price to its earnings per share, providing insight into how much investors are willing to pay for each dollar of profit. For growing, profitable businesses like Hims & Hers Health, the PE ratio helps investors assess whether the market’s optimism is justified by earnings growth prospects.

It is important to remember that what counts as a “normal” or “fair” PE ratio is shaped by factors such as the company’s expected growth rate, its risk profile, and how stable its earnings are. High-growth, fast-moving companies often trade at higher multiples, while mature, slow-growth businesses typically attract lower PEs due to tempered expectations.

At the moment, Hims & Hers Health is trading at a PE ratio of 63.07x. This is considerably higher than the healthcare industry average of 20.82x and also above the peer average of 45.80x. On the surface, this suggests a premium valuation. However, context is key. This is where Simply Wall St’s proprietary “Fair Ratio” comes in. For Hims & Hers Health, the Fair PE Ratio is calculated at 64.41x, which reflects the company’s unique combination of growth, margin, profitability, and risk factors, as well as its industry standing and market cap.

The Fair Ratio offers a more nuanced benchmark than industry or peer comparisons alone, since it adjusts for company-specific opportunities and challenges rather than treating all players as equals. By weighing Hims & Hers Health’s actual PE ratio against its Fair Ratio, we see that its current PE of 63.07x is right in line with the 64.41x Fair Ratio. This suggests that, according to this approach, the market is pricing Hims & Hers Health about right for its prospects and risks.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Hims & Hers Health Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply your perspective or “story” about a company, where you believe it is headed, how it will perform financially, and what a fair price should be, built on your own assumptions around future revenue, margins, and business momentum.

Unlike traditional checklists, Narratives link the company’s story to a financial forecast, and then directly to fair value, making it far easier to see the connection between your investment thesis and your numbers. Narratives are easy to create and compare on Simply Wall St’s Community page, where millions of investors share their views. This makes it an accessible, user-friendly tool for all experience levels.

They help you decide when to buy, sell, or hold by letting you compare a real-time estimate of Fair Value (based on your forecasts or community averages) against the current Price. Plus, because Narratives update automatically as new earnings or news comes in, you can adapt your outlook as the facts change, so there is no need to start over whenever there is an update.

For example, some investors believe Hims & Hers Health is a platform business on track for $6.5 billion in revenue by 2030, assigning a Fair Value as high as $114 per share. Others take a conservative approach based on slowing growth, regulatory uncertainty, and see Fair Value closer to $28 per share. Both views are visible and dynamic within Narratives.

For Hims & Hers Health, we have made it easy for you with previews of two leading Hims & Hers Health Narratives:

• 🐂 Hims & Hers Health Bull Case

  Fair Value: $86.09

  Shares are currently trading at 37% below this narrative's fair value.

  Revenue Growth Rate: 22.0%

  • Hims & Hers Health is building a vertically integrated, direct-to-consumer healthcare platform, not just selling pills, with strong operating leverage, rapid subscriber growth, and a robust financial position including zero debt.
  • Personalisation drives higher customer retention and monetisation, with 60% of users on personalised plans and major expansion into diagnostics, new treatment categories, and at-home lab testing.
  • While regulatory and legal risks exist, the company’s partnerships, diversification, and platform strategy create what is seen as a rare opportunity for outsized, venture-style returns in public markets.
• 🐻 Hims & Hers Health Bear Case

  Fair Value: $47.42

  Shares are currently trading at 14% above this narrative's fair value.

  Revenue Growth Rate: 18.77%

  • Continued growth is expected to be driven by diversification into new health categories, technology integration, and international expansion, but these strategies face execution and regulatory risks.
  • Analysts are concerned about increasing legal challenges, slowing customer growth, and operational complexity. Recent regulatory scrutiny and the end of key partnerships have led to modest reductions in fair value estimates.
  • With the current share price above this narrative's fair value and profit margins projected to shrink, there could be pressure on future returns if growth or efficiency falters.

Do you think there's more to the story for Hims & Hers Health? Create your own Narrative to let the Community know!

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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