"Less anxiety," "new hair," "better sex," "smooth skin," "less weight" - with these aspirational promises, U.S. telehealth provider Hims & Hers introduces its website, hims.com. Behind the buzzwords lie services and products designed to help customers achieve better health and well-being. Some shareholders of Hims & Hers might recently have needed a remedy for dizziness: in the first eight weeks of the year, the company's stock soared by more than 180%. However, at nearly USD 70, the stock abruptly turned downward, giving back most of its earlier gains. This sharp rise and fall is directly linked to the boom in weight-loss injections.
In the U.S., demand for so-called GLP-1 drugs surged so dramatically that the FDA last year declared medications from pharmaceutical giants Novo Nordisk and Eli Lilly to be in short supply. At the same time, it granted special approval to alternative providers to produce more affordable copies. Hims & Hers seized the opportunity. On February 10, 2025, during the Super Bowl broadcast, the company aired a commercial for its GLP-1 products. The provocative ad addressed America’s obesity problem and sparked heated debates nationwide. On Wall Street, the commercial further fueled the hype around the healthcare provider's stock. But less than two weeks later, the FDA effectively put Hims & Hers "on a diet": it announced that the shortages of Ozempic and Wegovy, Novo Nordisk’s weight-loss drugs, had been resolved.
Although the FDA granted suppliers of generic alternatives a 60-to-90-day grace period, Wall Street reacted strongly. Hims & Hers experienced the sharp decline mentioned earlier. For CEO Andrew Dudum, the recent development is a serious setback. He aims to position the company as the leading provider in the weight-loss treatment space over the long term. Nevertheless, this segment contributed less than a fifth of total revenue in 2024. Still, company revenues in 2024 reached nearly USD 1.5 billion over two-thirds higher than the previous year. The company is benefiting from a strong influx of users: in 2024, the number of registered customers rose by nearly 50% to 2.2 million. In Q4 alone, users spent an average of USD 73 on the company’s various telehealth products - 37% more than at the end of 2023. Hims & Hers leverages the traffic on its platforms and develops customized solutions with the help of artificial intelligence.
At the same time, management is successfully turning growth into profits. In 2024, the operating margin (on an adjusted EBITDA basis) entered the double-digit percentage range. Only a year earlier, Hims & Hers had reached break-even. Despite the setback from the FDA, the CEO has presented an ambitious forecast. Andrew Dudum is targeting revenue growth of 56% to 63%, while aiming to keep the operating margin stable between 12% and 13%. “We expect 2025 to be another exciting step in realizing our vision of next-generation healthcare,” commented the CEO. Dudum has already taken initial steps to mitigate the impact of restrictions on sales of generic weight-loss medications. In early April, the company announced plans to sell a branded drug from Eli Lilly. Wall Street responded positively - Hims & Hers is working to establish a support level around USD 25.
Even if this U.S. small-cap stock comes under renewed pressure, a soft-callable barrier reverse convertible offers attractive returns. Leonteq has launched two new variants of this structure on Hims & Hers. Investors have the chance to receive quarterly coupon payments, provided the underlying stock remains above the coupon trigger level on observation dates. This threshold is set at a low 50% of the initial price. In CHF, the conditional coupon yields 18% p.a., while in USD it offers 24% p.a. Even if Hims & Hers fails to meet the coupon condition, the projected return isn’t necessarily lost. A “memory effect” allows missed payouts to be made up later: as soon as the stock exceeds the trigger on any future date, both the current and any previously unpaid coupons become due. The nominal is partially protected by a barrier set at 50% of the initial price. Note also the soft-callable feature, which allows for early termination and repayment of the instrument.
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