Hims & Hers Faces Regulatory Storm Amid Record Growth

The telehealth sector’s standout performer, Hims & Hers, finds itself navigating turbulent waters as regulatory pressures threaten to disrupt its impressive growth trajectory. While the company’s latest financial results demonstrate remarkable expansion, a looming confrontation with U.S. health authorities casts uncertainty over its future prospects.

Spectacular Quarterly Performance

Recent financial disclosures reveal extraordinary momentum for the digital health provider. For the second quarter of 2025, revenue surged by an impressive 73% to reach $544.8 million. The company’s subscriber base expanded significantly, climbing to 2.4 million active users. Perhaps most notably, Hims & Hers achieved net earnings of $42.5 million, demonstrating its ability to convert rapid growth into substantial profitability.

Regulatory Challenges Emerge

The primary threat to the company’s continued success originates from regulatory scrutiny. The U.S. Food and Drug Administration has issued warnings to Hims & Hers concerning what the agency characterizes as “false and misleading” promotional claims regarding its compounded alternatives to semaglutide-based weight loss medications. Regulatory officials have taken particular issue with representations suggesting therapeutic equivalence between the company’s formulations and approved pharmaceutical products.

This regulatory challenge strikes at a crucial revenue stream for the business. The weight management segment has become a significant contributor to the company’s financial performance, making potential restrictions in this area particularly consequential for future growth.

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

Valuation Concerns Surface

Market observers have raised questions about whether the company’s current valuation adequately reflects the emerging regulatory risks. Hims & Hers shares currently trade at a price-to-earnings multiple of 6.6, substantially exceeding the sector average of 1.3. This valuation gap suggests investors continue to anticipate robust expansion despite the gathering regulatory clouds.

Recent trading patterns highlight the market’s uncertainty. After declining to $42 during September, the equity has experienced considerable volatility, reflecting divided sentiment among market participants. The persistent regulatory overhang continues to influence investor behavior, creating unpredictable price movements.

The central question facing market watchers no longer revolves around whether regulatory action will occur, but rather when it might materialize and what form it could take. The resolution of this regulatory uncertainty will likely determine whether Hims & Hers can maintain its exceptional growth story or faces significant operational headwinds in the quarters ahead.