Hims & Hers Faces a Squeeze on Two Fronts: Margins Shrink as Amazon Looms

The telehealth operator Hims & Hers is navigating one of its most turbulent periods yet, caught between a costly strategic pivot in its weight-loss drug business and fresh competitive pressure from Amazon. The company’s first-quarter earnings, due on May 11, are expected to reveal a stark contrast: revenue grinding higher while profits take a nosedive.

Analysts surveyed by Zacks Investment Research forecast quarterly sales in the range of $600 million to $625 million, a modest uptick from the $586 million posted a year earlier. But the bottom line tells a different story. Earnings per share are projected at just $0.06 — a plunge of roughly 70% from the prior-year quarter. The culprit is a sweeping overhaul of the company’s business model, which has sent capital expenditures soaring 138% year-over-year by the end of 2025.

A Settlement That Cuts Both Ways

The margin compression stems directly from the March 2026 truce with Novo Nordisk. Under the agreement, Hims & Hers committed to prioritizing the Danish drugmaker’s branded GLP-1 products — Wegovy and Ozempic, available as both injections and pills — on its platform. Compounded alternatives will only be offered when official supply shortages are documented. In exchange, Novo Nordisk dropped its patent lawsuit.

That settlement eliminated a significant legal overhang, but it came at a steep cost. Compounded GLP-1 medications had been far more profitable for Hims & Hers. The branded versions start at $149 per month under the cash-pay model, a price point that inevitably squeezes EBITDA margins.

Insider Activity and Global Ambitions

While the market digests the implications of the Novo Nordisk deal, insider transactions have added another layer of scrutiny. Chief Legal Officer Soleil Boughton sold 9,463 Class A shares on April 20 at $30.00 apiece, according to an SEC filing dated April 22. The sale was executed under a pre-arranged trading plan pursuant to Rule 10b5-1. It follows a similar move by the CFO earlier in the month.

Despite the near-term headwinds, Hims & Hers is pressing ahead with international expansion. The planned $1.15 billion acquisition of Australian digital health company Eucalyptus is expected to close by mid-2026. Eucalyptus, which operates in Australia, Japan, and parts of Europe, generates an annualized revenue of more than $450 million.

Should investors sell immediately? Or is it worth buying Hims & Hers?

A New Front in Women’s Health

In a bid to diversify beyond the fiercely competitive weight-loss space, the company has launched a new offering targeting the menopause market. Since Wednesday, the platform has been providing treatments for perimenopause and menopause, with a base package of estrogen patches priced at $134 per month. The timing is strategic: estrogen patches are in short supply across the U.S., with demand more than tripling between 2018 and early 2026. The FDA removed an old safety warning last year, prompting physicians to prescribe hormone therapies more frequently to women aged 45 to 54.

Generic estrogen patches carry thin margins for manufacturers, making new production capacity unattractive. Experts predict the shortages could persist for years. Hims & Hers says it has secured sufficient inventory to capitalize on the gap.

Amazon’s Shadow

Yet the stock dropped nearly 5% on Wednesday, driven not by the menopause launch but by a development in a completely different segment. Amazon has rolled out its own weight-loss program, stoking fears that the e-commerce giant will poach price-sensitive customers from Hims & Hers. Bank of America analysts view the threat as credible, warning that revenue could take a meaningful hit from 2026 onward. Citigroup’s team, however, downplays the risk, pointing to limitations in Amazon’s offering.

The Bigger Picture

The push into menopause care is part of a broader strategy to reduce reliance on the cutthroat GLP-1 market. The company’s women’s brand, Hers, is targeting $1 billion in revenue in 2026. More than one million American women enter menopause each year, providing a steady stream of potential customers.

Financially, the company remains on solid ground. Revenue climbed to $2.35 billion last year, with the active member base swelling to 2.5 million. Net income stood at $128 million. Management has guided for revenue of up to $2.9 billion in the current fiscal year.

The May 11 earnings call will be the first concrete test of how much Amazon’s entry is already eating into core growth. But the bigger question for investors is whether the established segments — sexual health and dermatology — can absorb the margin damage from the GLP-1 restructuring. With the stock trading around $29, a credible roadmap back to profitability from management could shift sentiment, even if the first-quarter numbers look ugly.