Hims & Hers Stock Plunges Post Q1 Earnings Miss, Gross Margin Down

Hims & Hers Health, Inc. HIMS reported quarterly adjusted loss per share of 18 cents in first-quarter 2026, against the year-ago period’s adjusted earnings per share (EPS) of 20 cents and the Zacks Consensus Estimate of EPS of 4 cents.HIMS’ Revenues in DetailHims & Hers registered revenues of $608.1 million in the first quarter, up 3.8% year over year. However, the figure lagged the Zacks Consensus Estimate by 1.9%.Solid revenues from the Rest of the World segment drove the top line.Shares of this company lost nearly 15.2% in today’s pre-market trading.Hims & Hers’ Geographical ResultsIn the first quarter of 2026, revenues in the United States declined 8.4% year over year to $529.9 million.Rest of the World revenues grossed $78.2 million, up from the year-ago quarter’s $7.3 million.During the reported quarter, subscribers were 2.6 million, up 9.2% year over year.Monthly online revenue per average subscriber decreased 5.9% year over year to $80 in the first quarter. Per management, the decrease was primarily due to the shift to shorter shipping cadences for certain of HIMS’ offerings.Hims & Hers Health, Inc. Price, Consensus and EPS Surprise Hims & Hers Health, Inc. price-consensus-eps-surprise-chart | Hims & Hers Health, Inc. QuoteHIMS’ Margin AnalysisIn the first quarter of 2026, Hims & Hers’ gross profit decreased 7.9% year over year to $396.8 million. The gross margin contracted 825 basis points (bps) to 65.2%.Marketing expenses decreased 3.9% year over year to $222 million, while technology and development expenses jumped 56.9% year over year to $46.9 million. General and administrative expenses surged 125.6% year over year to $109.7 million, while operations and support expenses increased 53.1% year over year to $96.5 million. Operating expenses of $475.1 million increased 27.4% year over year.Operating loss totaled $78.3 million against the year-ago quarter’s operating profit of $57.9 million.Hims & Hers’ Financial PositionHims & Hers exited first-quarter 2026 with cash and cash equivalents and short-term investments of $750.9 million compared with $577.5 million at the end of 2025.Net cash provided by operating activities at the end of first-quarter 2026 was $89.4 million compared with $109.1 million a year ago.HIMS’ OutlookHims & Hers has provided its revenue outlook for the second quarter and raised the same for 2026.The company projects revenues for the second quarter of 2026 in the range of $680 million to $700 million, reflecting an uptick of 25%-28% year over year. The Zacks Consensus Estimate is pegged at $647.2 million.For the full year, HIMS now projects revenues in the range of $2.8 billion to $3 billion (representing growth of 19%-28% from 2025 levels), up from the prior outlook of $2.7 billion to $2.9 billion (representing growth of 15%-24% from 2025 levels). The Zacks Consensus Estimate is pegged at $2.82 billion.Our Take on Hims & HersHims & Hers recorded robust improvement in the top line and Rest of the World revenues in first-quarter 2026. The increase in subscribers during the quarter was encouraging.Per management, HIMS made a strategic pivot in the first quarter that expanded its assortment of branded GLP-1 products. Early demand signals show its consumer reach broadening meaningfully. In March, the company announced Hims & Hers Benefits (a program providing discounts on advanced diagnostics and sleep technology).In February, HIMS entered into a definitive agreement to acquire Eucalyptus, which is expected to accelerate the company’s ability to bring access to high-quality, personalized care to more people across the world. These raise our optimism about the stock.However, Hims & Hers’ lower-than-expected results and dismal bottom-line results in the quarter were disappointing. Lower revenues from the United States were also reported, while monthly online revenue per average subscriber also declined. The contraction of the gross margin during the quarter does not bode well for the stock.HIMS’ Zacks Rank and Key PicksHims & Hers currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader medical space that have announced quarterly results are BrightSpring Health Services, Inc. BTSG, DaVita Inc. DVA and Labcorp Holdings Inc. LH.BrightSpring, sporting a Zacks Rank of 1 (Strong Buy), reported first-quarter 2026 adjusted EPS of 39 cents, beating the Zacks Consensus Estimate by 35.4%. Revenues of $3.61 billion outpaced the consensus mark by 8.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.BrightSpring has a long-term estimated growth rate of 44.5%. BTSG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 14.6%.DaVita reported first-quarter 2026 adjusted EPS of $2.87, beating the Zacks Consensus Estimate by 19.1%. Revenues of $3.42 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently flaunts a Zacks Rank #1.DaVita has a long-term estimated growth rate of 20.2%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.4%.Labcorp reported first-quarter 2026 adjusted EPS of $4.25, beating the Zacks Consensus Estimate by 3.9%. Revenues of $3.54 billion surpassed the Zacks Consensus Estimate by 1%. It currently carries a Zacks Rank #2 (Buy).Labcorp has a long-term estimated growth rate of 7.9%. LH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%. Radical New Technology Could Hand Investors Huge Gains Quantum Computing is the next technological revolution, and it could be even more advanced than AI. While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure. Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power. Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. 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