Once a darling of the investment community, Hims & Hers is confronting a sobering shift in its growth narrative. The era of triple-digit revenue expansion appears to be ending, replaced by forecasts of a sharp slowdown that are unsettling market analysts. Doubts are mounting regarding the sustainability of its success, particularly as core operations in men’s health face increasing pressure.
A Valuation Under Scrutiny
The fundamental concerns are clearly reflected in the company’s stock performance and valuation metrics. Since peaking in February 2025, the equity has shed nearly 60% of its value, currently trading at $29.62. Despite this precipitous decline, the shares are not considered cheap. With a forward price-to-earnings (P/E) ratio hovering around 45, the valuation remains significantly elevated above the sector average of approximately 27.
The chart damage coincides with a long list of mounting challenges:
* Growth Evaporation: A projected drop from explosive triple-digit rates to a mere 17%.
* Sector Underperformance: The stock plummeted over 12% in one month, far outpacing a modest decline in the broader healthcare sector.
* Profitability Risks: Weak third-party sales data points to potential margin erosion.
Morgan Stanley Sounds the Alarm
The recent sell-off gained further momentum from a revised assessment by Morgan Stanley. The firm’s analysts warn of a drastic cooling in the telehealth company’s business dynamics. For the full year 2026, they now anticipate revenue growth of only about 17%. This stands in stark contrast to the explosive 111% growth Hims & Hers posted for Q1 2025.
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This abrupt deceleration is attributed primarily to weaknesses in the sexual health segment for men. Market observers project this core area will become a headwind in the first half of 2026. Intensifying price competition and unfavorable shifts in subscription model dynamics are seen as key factors gnawing at the business’s foundation and profitability margins.
While management is attempting to diversify into adjacent areas like weight management and hormone health, the company’s reliance on its legacy success products remains substantial. The planned integration of Zava in Europe could provide a medium-term boost, but in the current climate of market skepticism, it also carries significant execution risk.
All Eyes on the February Outlook
Investor attention is now intensely focused on February 23, 2026, when Hims & Hers is scheduled to release its fourth-quarter results. Analysts are expecting a revenue surge of nearly 29% for the quarter, but simultaneously forecast a pronounced decline in earnings per share.
However, the primary catalyst for the stock’s next move will likely be the forward guidance provided by management. Should the company confirm fears of full-year 2026 growth in the range of 16% to 17%, it would substantiate the bearish scenario and likely extend the period of investor unease.
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