Hims & Hers Stocks Sinks Despite Huge Revenue Growth. Is This a Buying Opportunity in the Stock?

Core Viewpoint - Hims & Hers experienced significant growth in Q4 but saw its stock price decline sharply following the earnings report, primarily due to the removal of semaglutide from the FDA's shortage list, which impacted the company's ability to sell GLP-1 weight loss drugs [1][2][11]. Group 1: Financial Performance - Q4 revenue surged 95% to $481.1 million, exceeding the forecast of$465 million to $470 million [4][8]. - Net orders increased by 22$168 [4][8]. - Subscriber numbers grew 45% year over year to 2.23 million, with 55% having at least one personalized subscription [5][8]. - Adjusted EBITDA soared to $54.1 million from$20.6 million a year ago, and adjusted EPS was $0.11, slightly above the analyst consensus of$0.10 [7][8]. - Operating cash flow nearly quadrupled to $86.4 million, and free cash flow increased over 450$59.5 million [7][8]. Group 2: Future Guidance - For 2025, Hims & Hers forecasts revenue between $2.3 billion and$2.4 billion, representing growth of 56% to 63% [8]. - The company anticipates Q1 revenue between $520 million and$540 million, indicating growth of 87% to 94% from the previous year [9]. - Weight loss revenue is projected to be $725 million for 2025, excluding semaglutide, with growth expected from oral weight loss medications and the generic GLP-1 drug liraglutide [10][12]. Group 3: Market Dynamics - The stock price decline was attributed to the company's announcement of discontinuing semaglutide-based weight loss drugs after Q1, which had previously contributed$225 million in revenue for 2024 [11][13]. - The company will need to convince patients to switch to alternative prescriptions to achieve its ambitious growth targets in the weight loss category [14]. - The stock trades at a forward P/E ratio of 37 based on 2025 estimates, which is considered reasonable given the projected growth, but concerns remain regarding the ambitious guidance for weight loss drug revenue [14].